Would it be worth me transferring both of my pensions into my civil service pensions to consolidate and have just 1 pension pot?

I have recently joined the civil service. I have 2 previous pensions from the private sector. The first isn't of much value as I was on a smaller wage, the 2nd is pretty reasonable for the 3 years I contributed before changing jobs. Would it be worth me transferring both of my pensions into my civil service pension to consolidate and have just 1 pension pot?

Hi Bec,

Thanks for the question. I shall aim to give you some pointers and things to consider which will hopefully help you come to a decision. I know you have said you have recently joined the Civil Service, I think to be able to transfer in Public or Private Sector pensions to the Civil Service it has to be within the first 12 months of you joining. So if you are within the first 12 months as least you know this it is a possibility.

Benefits of holding a single pension via one provider:

1. It often makes sense to consolidate pensions for a few reasons, such as cost. Each pension will have its own associated costs and it can often be cheaper to pay costs on just one policy that on multiple. So it maybe cost beneficial to consolidate. I can't comment on that for sure without knowing the associated costs of each of your existing pensions.

2. Consolidating makes administration easier. You will only receive one statement from one provider and only have to deal with one provider for all your pension matters. Also, in retirement your pension income would just come from one source rather than multiple. Some people aren't too fussed about this, but others prefer that over having income in retirement coming from multiple sources. So I guess what I am saying is that its a bit tidier, but that probably shouldn't be your main influence.

3. It's easier to keep track of how your pension is performing and if its on track to deliver you the income you desire in retirement if its held with one provider. If its not on track it would be easier to establish how much extra you would need to pay in to get back on track.

So there's a few benefits to consolidating for you. But, I shall also detail below some of things you should be aware of:

1. Check with your current private sector pensions that you ae not tied into them in anyway. Some pension can have exit penalties are charges to transfer out. The easiest way to establish this is to obtain a current and transfer value. If the transfer value is lower this would imply that there are fees to transfer out. This might bring into question if its worth doing depending on the size of the penalty.

2. Different pensions offer different features and benefits. Some are more flexible than others. So the most suitable pension for you will be the one that an facilitate the flexibility you would want in retirement.

3. Pension transfers are often non-reversible. So once that have been completed you can't just always change your mind. If it turns out not to be the right thing to do, the previous provider does not have to take the funds back. Something to be aware of.

4. The Civil Service will just act on your instruction if you request to have your plans consolidated. They won't offer you any advice, therefore you are less protected as they are only acting on your instruction.

I have just touched on some key things for you to think about here, but I would say if you have any doubts about what to do, consulting with a financial adviser to take a closer look into your private pensions as well as establishing what your circumstances and long term planning objectives are will then allow a professional to advise on on the best course of action.

I hope that has been helpful.

Best Wishes,

Dan Willers
Chartered Financial Planner
Robertson Baxter Ltd
www.robertsonbaxter.com