Things to consider when consolidating your pensions

Throughout your lifetime, you may have worked for several employers to further your career prospects. ‘Job for life’ for many is not an option as you move up your career ladder to achieve broader experience and off course better remuneration. As you change jobs more frequently during your life, you may have accumulated a number of small pensions along the way. It can be hard to keep track of all the pension plans and difficult to really know how much your total retirement benefits are worth. As a result, many individuals like you may have found your pension plans becoming increasingly fragmented therefore in most cases being left unmanaged in an increasingly volatile market.

When you leave one job to move to another one, you are treated as having left the workplace pension scheme, but you do not lose the benefits you have accrued. You have the option of keeping your pension where it is or transferring your pension(s) to your new workplace. Alternatively, you may wish to consolidate your pensions in a personal pension of your choice that is either managed by you or set up a personal pension that is recommended by your Personal Financial Adviser & managed by an Investment Manager.

At Simply Ethical, we offer you the opportunity to consolidate all your pensions to help you get the maximum benefit from pension arrangements left behind with your previous employers. Consolidating all your pensions with one provider may help reduce charges, increase investment options and make it easier to administer.

An example of how pension consolidation works:

Mr Ali has worked with 2 previous employers where he has his pensions. In addition, he has 2 personal pensions (SIPPs) with different providers. Mr Ali wants a professional Financial Adviser to review his pensions, advise on a suitable pension with a diversified portfolio of Sharia compliant investments. As a result, he appoints Simply Ethical as its Financial Adviser. Our Financial Adviser will understand Ali’s objectives, personal circumstances and review each pension plan, if deemed suitable for him he may be advised to transfer all these pension(s) to one pension plan recommended by Simply Ethical Financial Adviser. Our Financial Adviser and Investment Manager will work together to devise a suitable investment strategy that works for Ali. The investment portfolio will be actively managed on a discretionary basis.

Before switching your pension(s), you need to consider a number of factors including the following:

• Your current pension provider may impose exit charges and other costs associated with the transfer. You should understand the total charges you would incur prior to instructing any transfer. You can get in touch with your existing pension provider(s) to understand whether there is any transfer out costs.

• You should compare the costs between your current provider(s) and the pension offered by Simply Ethical.

• You should consider what Sharia compliant investments are available through your existing pension(s)

• You should compare the investment options available within your existing pensions and the pension offered by Simply Ethical to understand which investments would help meet your investment needs and your retirement goals.

• You need to be careful before moving your pension pot out of certain schemes as some of the pension schemes offer guaranteed benefits or protected benefits. For example, some of the public sector schemes, such as nurses’ or teachers’ schemes offer extremely generous benefits which can be hard to replicate elsewhere.

• If you’re a member of a defined benefit pension scheme and the value of your benefits is more than £30,000, you will need to take professional financial advice to ensure that the value you are offered represents good value and that is in your best interest – you may be giving up guaranteed pension benefits, especially if you are moving your pension pot to defined contribution pension scheme, like SIPP.

• You should consider whether you will lose any employer contributions as a result of transferring your pension.

• You should consider whether your new pension will let you manage your pension in the way you want (e.g., paperless set up, 24/7 online access, Sharia compliance, dedicated adviser etc…).

How can we help?

At Simply Ethical, you can consolidate your pensions using either of the service options below:

1. Online Advice – this is simply a low cost online investment advice service which asks you a number of questions to understand your objectives and risk profile to then allocate you to a suitable portfolio of investments that are managed by us. Simplified Advice Online does not provide pensions advice or pension transfer advice. So, the decision to transfer your pension(s) to Simplified Advice Online is solely made by you. If you are still unsure and need financial advice, please contact us.

2. Personal Advice – we can help you by reviewing your existing circumstances and advise whether or not it is in your best interest to consolidate your pensions. Moreover, offer advise on the most suitable pension scheme and the investment strategy that meets your objectives.

To learn more about how we can help you, book a free initial consultation with our Financial Adviser.


Past performance is not a reliable indicator of current or future returns. This overview contains general information only and does not consider individual objectives, taxation position or financial needs. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor. It is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy to any person in any jurisdiction in which such an offer or solicitation is not authorised or to any person to whom it would be unlawful to market such an offer or solicitation.