Should I Combine My Pensions?

Some of us can count all the jobs we’ve had on one hand, while others will dip their toes into a variety of careers along the way. But whether you’ve had 5 or 15 employers, it’s a good idea to keep on top of all the pension schemes you’ve been enrolled into — especially as there’s estimated to be around £9,470 ^[1] sitting in each forgotten pot.

When you change jobs, it can be easy to lose track of the pension you used to pay into — especially when you’re enrolled straight into the next one.

Even if you do know where all your pots are, it can be tricky to know what to do with them. Do you just leave them where they are, or is it worth combining pensions?

Whether you see people refer to this as ‘pension consolidation’, ‘merging pensions’ or ‘combining pensions’, transferring your old ones into one pot could have many benefits, and it’s probably easier to do than you think.

If you’re now wondering, “should I combine my pensions?”, here’s everything you need to know.

Jump to:

• What is pension consolidation?
• Should I combine my pensions?
• Benefits of combining pensions
• Risks and disadvantages of pension consolidation
• How do I combine my pensions
• 2025 regulatory changes affecting pension consolidation
• Choosing the right pension provider for consolidation

What is pension consolidation?

Pension consolidation is simply the process of combining multiple pension pots into one.

You may be able to consolidate old pensions by transferring them into your current workplace scheme (if your provider allows this), or a new pot entirely — like the Personal Pension we offer.

Whichever option you choose will depend on several factors, including fees, investment choices, and flexibility.

Personal pensions often give you more control over when and how much you contribute, plus greater choice in how your money is invested — including ethical investment options. However, workplace pensions may offer employer contributions and lower fees, so it's worth comparing both before deciding.

You can read more about how each type of pension differs in our blog: SIPP vs workplace pension.

Having fewer pensions to manage makes retirement planning more straightforward. Instead of tracking multiple pots across different providers, you can see your total savings in one place and streamline the withdrawal process when you retire.

However, these aren’t the only benefits of consolidating pensions (and we’ll go into these in more detail later on).

Types of pensions you can consolidate

You may not realise it, but there are different types of pensions available, and these all have their own pros, cons, and rules when it comes to taking the money out of them.

So, when it comes down to deciding, “should I consolidate my pensions?”, an important thing to check is whether they can be transferred to another provider — and if they can, whether that’s the right decision. Because it really does depend on the type of pension you have.

If you’re unsure, check your paperwork or reach out to your provider. But as a general rule:

• If you have any personal pensions, these will be defined contribution schemes — though many workplace pensions also fall into this category.
• You’re more likely to have a defined benefit pension if you’ve worked in the public sector (aka, the NHS, civil service, teaching, or local government), or for large established private sector employers.

Here’s a quick overview of the types of pensions you can consolidate, and the things to consider:

With Wealthify’s Personal Pension, you can transfer any of your defined contribution pensions in, but we can’t accept the following:

• Pensions with any protected benefits
• Overseas pensions
• Crystallised plans (pensions you’re taking an income from)

Should I combine my pensions?

Before you can answer the above question, it’s worth knowing the pros and cons of consolidating your pensions into one, vs leaving them in their respective pots.

Merging pensions can make them easier to manage and access when you’re ready to retire, but it isn’t suitable for everyone. But as we’ll explain later, it isn’t just the type of pensions you have that can Influence your decision to consolidate (or not consolidate).

So, should you combine pensions? Here are some things to ask yourself first:

• Will I need to pay exit fees to transfer? Not all providers will charge exit fees, but if yours does, it’s worth checking how much these will eat into your pension savings.
• Will I be charged higher management fees? Different providers charge different fees, so you could end up paying more or less in the long run if you consolidate.
• Will I lose out on valuable benefits? This may be a guaranteed income for the rest of your life when you retire, or a higher annuity rate if you stay with your provider – which you could lose by transferring out of the scheme.²

Benefits of combining pensions

Is it worth combining pensions if your existing pots don’t offer any special benefits you wouldn’t want to lose?

When it comes to defined contribution pensions, the money is invested in assets (like stocks and bonds) to give it a chance to grow. This means that how much you end up with will depend on how much was paid in, and how your investments performed.

Here are some potential benefits of combining pensions that fall into this category:

• Lower charges: management fees can eat into your pension, and if you have multiple pots, you’ll likely be paying different amounts for each. Moving to one provider can make it easier to keep on top of these and other charges, and you could end up paying lower ones too.
• Simplified management: if your pensions are in different places, you’ll need to log into multiple platforms to do things like check your balance or review your investments to make sure they align with your risk appetite and growth ambitions.
• Easier planning: having your retirement fund in one pot will give you a clear picture of how much you have at any time, so you can quickly see if you’re on track to achieving your goals. If you’re not sure how much you need, the Retirement Living Standards can give you an idea.
• Improved death benefits: transferring your pensions to a different provider could give you death benefit options that aren’t offered with your current scheme(s) — which impacts what happens to your retirement savings when you pass away.
• More flexibility: moving to a new provider could give you more control over how your savings are invested or how much you contribute. With our Personal Pension, you can transfer your old pots, top it up as and when it suits you, and choose to only hold ethical investments.

Risks and disadvantages of pension consolidation

For many people, combining your pensions just makes sense. Why wouldn’t you want them to be easier to manage through one platform?

While that may be true, there are some things to check before you commit:

• If you’ll be charged exit fees to transfer, and how much this would be.
• If you’ll lose valuable benefits, such as an income for life when you retire, or a guaranteed annuity rate (which could be higher than what you’d typically get).
• If your pot is growing nicely, could moving it mean worse performance? you could risk moving to a provider that doesn’t invest your money in comparable funds — which means less potential growth over time.

We can’t provide advice at Wealthify, but if you’re unsure whether transferring is the right decision for you, then it’s worth speaking to a financial adviser first.

How do I combine my pensions

If you won’t lose any special benefits, pay exit fees, or give up being in a high performing fund, you may want to merge your pensions to make them easier to manage, and keep track of your savings.

But if you’re unsure of where to start, here’s a quick rundown on how to consolidate your pensions with Wealthify:

1. Make sure you know where all the pots you want to transfer are — and if you’re unsure, then check out our handy guide on how to find old pensions.
2. Contact your current provider(s) to check that transferring is possible.
3. Use the Pension Plan creator on our website or app to choose from five investment styles, based on your risk appetite and see how much your pension could be worth. We’ll ask you a few questions to find the suitable risk level and theme (Original or Ethical) for you.
4. Enter details for each of the pots you want to transfer — such as the name of your provider, account reference number, and the approximate value of your pension.
5. Authorise your transfer(s), and we’ll contact your provider(s) to get your pension’s current cash value ready for us to invest into your new pension.
6. Once your Wealthify pension has been set up, you can add to your pot as and when it suits you, as well as check your performance at any time via desktop or our app.

2025 regulatory changes affecting pension consolidation

In recent years, the UK Government has proposed to reform pensions through the Pension Schemes Act 2025, which includes plans for pension megafunds.

Separately, the government has been developing a pensions dashboard.

Here’s what these updates could mean for you and your retirement savings:

The Pension Schemes Bill will see all multi-employer Defined Contribution pension schemes and Local Government Pension Scheme pools operate at ‘megafund level’ — which essentially means combining a number of pension funds into one larger fund.

The aim is to provide opportunities to invest in big infrastructure projects and private businesses, which could help to boost the economy, and potentially drive “higher returns for savers” ^[3].

And when it comes to the pensions dashboard, it’s pretty much what it says on the tin, as this will provide a central hub for people to see all their pension information — including your State Pension (if you meet the criteria to claim it).

It will also help savers to hunt down their old pension pots, with providers being given a deadline of 31st October 2026 to connect to the dashboard ^[4].

But is it worth combining pensions if the above come into play?

Although the pensions dashboard will make it easier to review how much you could have for your retirement, and investing in megafunds could open up more opportunities for this money to grow, consolidating your pots can still offer a number of benefits.

This includes the potential to lower the fees you pay, and make it easier to review and change your investments so that they align with both your goals and values.

Choosing the right pension provider for consolidation

Here are some things to consider when choosing a new provider to transfer your pensions to:

• Do they charge high fees, and will you face penalties if you want to transfer out in future?
• Are they authorised and regulated by the Financial Conduct Authority?
• Do they have positive reviews from lots of happy customers?
• Do you want to choose your investments or have experts do it for you?
• What are their options when it comes to making deposits and withdrawing your money?

At Wealthify, our investment experts will do everything for you — from choosing the investments in your pension, to managing them on an on-going basis. How your money is invested will be based on your appetite for risk, and whether you only want to invest in ethical companies and industries.

We also offer a simple pension transfer service so you can have all your pots in one place, working together to help you reach your retirement goals.

So, to answer the question: “should I combine my pensions?” Consolidation could offer many perks, from having more control over how your money is invested, to potentially lowering the fees you pay. But do check that you won’t lose any protected benefits by transferring out of your current schemes first.

References

1. Pension Policy Institute | Briefing Note 139 Lost Pensions 2024 (download the PDF)
2. Money Helper | Guaranteed Annuity Rates
3. Government website | Pensions Dashboard Guidance on Connection the Staged Timetables
4. Government website | Pension Plan to Double 25 Billion Megafunds