Sponsored by Standard Life

Don’t put all your eggs in one basket. That’s usually good advice when you’re thinking about your personal finances. When looking at insurance, you compare the options. When investing in companies, you spread your bets. So why would you want all your pensions in one place? Well, it’s because pensions are more like chickens than eggs… they have a habit of wandering off.

In the UK, an estimated £19.4 billion has simply wandered off in mislaid pensions – mostly because people forget to update their contact details when they move home, then stop getting the letters, then forget their savings exist.

If that’s not convinced you to count your chickens and ringfence your savings – or to consolidate your pensions in the proper lingo – we’ve got plenty more reasons coming up. And if you decide it’s for you, you can find out how to do it in Standard Life’s guide.

10 reasons why you might want to combine your pension pots

1. You won’t forget about and lose the money you’ve saved

It’s not uncommon to have 6 or 7 pensions kicking about, especially if you’ve had lots of different employers. While that’s not such an issue if you’re a record-keeping whizz, the extra admin is reason enough to combine. And it’s easily done. Start by using the Government’s pension tracing service to track them down, then choose a provider and use their pension transfer service. Chickens cooped!

2. You could save money on fees and charges

The fees you pay for your pensions will vary from account to account and, as you might expect, some will be cheaper than others.

Let’s say you have two accounts: account A charges 1.5% and account B charges 0.5%. Both make a 5% return every year. If you started saving at 30 with £15,000 in both accounts, and topped up £250 a month until you retire at 67, account A would have about £278,000 while account B would have about £357,000. Fees are no joke!

3. You could save money on unused benefits and add-on services

Older-style pensions often come with useful extras, from life insurance and critical illness cover to financial or legal advice. It’s worth knowing what’s included with your pensions and other accounts so you’re not doubling up or paying for services you don’t need. Even when they’re ‘included at no extra cost’ you might find the overall fees are higher anyway. Combine and conquer.

4. You could make more money from better investments

Every pension contains lots of different investments. They’re mixed baskets of shares, bonds, property, gold and so on. But not all pensions are created equal or designed with the same goals in mind. So to keep an eye on what your savings are tied to – and make sure nothing is going down the plughole – it’s much easier to keep it all in one pension, in one place, managed in a way you understand.

5. You could take more control and choose your own investments

If you’re a more experienced saver who wants to choose and manage your own investments, you could move to an account that gives you more control. In doing so, you could stand to save on a few more fees and pick some winners that set you for life. But beware - the risk will be in your own hands!

6. You could access your money in more ways at retirement

Older private pension schemes can be restrictive. Before 2015, retirees generally drew from their pensions by buying an annuity, which provides a guaranteed income for life. But in 2015, Pension Freedoms were introduced to give retirees additional flexibility, such as access to a chunk of the cash from age 55 and the income drawdown option, which allows a pension to stay part-invested while you take an income from it.

If you have pensions that started pre-2015, these might not include access to the Pension Freedoms that newer accounts have. Check the details of your pensions schemes to find out, or combine them into a new one.

7. You could choose the level of risk you’re comfortable with

These days, you really don’t need to know anything about investments to make an informed choice about how your pension money is invested.

Lots of the big pension providers have simplified everything for you, with a range of 4 or 5 flavours to choose from. Spicy pepper? Balanced beige? It’s up to you when you consolidate your pensions into a newer model. Alternatively, you could choose based on how you want to take your money at retirement and let the experts pick according to that.

8. You could choose to take a more sustainable approach

Having a say about your risk level is one thing, but what about the investments themselves and how they make money? What if you’re invested in companies whose operations go against your values?

Much like choosing your risk level, you can choose to align your pension with your values. But does it actually make a difference? Research says it does. Choosing a more sustainable pension can have a 21x bigger impact on your carbon footprint than making other lifestyle changes. And some providers are even starting to offer this responsible approach as standard. Sorted!

9. You’ll know what you have at a glance and can plan effectively

If you don’t like maths, you’ll love this reason. Looking at big numbers can make people dizzy at the best of times, but looking at 6 or 7 big numbers at the same time – trying to understand what they mean and how they’re changing – is a task too far. Make it easier for yourself: add them together and you’ll only have one number to track.

10. You’ll have a lot less admin to keep up with

One password to remember. One provider to update when you change address. One set of letters coming through your door to show you one set of numbers, benefits and terms. Imagine that! You could even choose an account that lets you manage it all online or through an app.

Although it might not save or make you any money, having less paperwork to keep up with over the years may be the best reason on the list. Take on a little bit extra now by finding your wayward pensions with the Government tracing service, combine the lot for all the aforementioned benefits, and make it easier for your older self when the time comes to claim the goodies.