tax on multiple pensions. The average worker now … The other two start … Your capital is at risk. If you do have multiple pensions, you may want to consolidate them. If you have many small pension pots, now is a good time to make sure you don’t lose track of your previous contributions and think about the pros and cons of consolidating your small pension pots into one scheme. How you can take your pension A pension worth up to £10,000. If you’ve had more than one job during your working life, it’s likely that you may have paid into more than one defined contribution pension scheme. Your pension provider should send you a statement every year with the current value of your pension and the forecast for what it will be worth at retirement. It’s likely to be cheaper to take income drawdown from a single, larger pot than several smaller pots. It's easier to manage your money if you know where it is. However, some older pensions may only offer you the option of a select few investment funds and you could be missing out if these are underperforming the market. The lifetime allowance is a limit on the value of payouts from your pension schemes that can be made without triggering an extra tax charge. If you’ve built up two or more pension pots during your working life, it may be easier, and you may get a better deal, when you retire if you combine them. Steve Webb replies: You can draw down from two different pots at different times if you wish. A defined benefit or Final Salary pension is very different from a standard defined contribution pension. For example, when you move home you must tell all your pension providers about … With multiple pension pots you might find yourself drowning in paperwork and unable to see the wood for the trees. In fact, any accepting pension provider may insist you get prior regulated financial advice. (+ At What Age), Need help with your pension planning? Similarly, if you intend to use income drawdown to provide payments in retirement, amongst other things, you should compare charges. Will the new product help you meet your goals in a way that the old product couldn’t? If you want to transfer any defined benefits into an existing defined contribution scheme, so that you can combine your pension pots, you’re no longer allowed to do this if your defined benefits are in an unfunded public sector scheme. Consolidating multiple pension pots and transferring to a SSAS. © Copyright 2021 The Pensions Advisory Service 120 Holborn, London EC1N 2TD. Over 40% of Britons have three or more pension pots including their state pension. In particular, you can take three pots of up to £10,000 without this affecting your Lifetime Allowance (or without … Over a third of the 2,000 people surveyed (36.5%) by OnePoll and fintech firm mypensionID admitted to losing track of the pension pots they had contributed to. The investment world is constantly changing and there are literally thousands of investment funds available. Our independent pension advisor is on hand to help you. Pension Freedoms Podcast. You can find out more about transferring pots here. The reason why advice is required is to ensure that you are not giving up valuable guaranteed pension benefits and that the transfer is in your best interests. You should never move a pension without first checking that you don’t have any guaranteed benefits attached to it. You may have to pay tax on contributions over £4,000 a year (known as the ‘money purchase annual allowance (MPAA)’). If you have several different pension pots, there are potential advantages if you consolidate them into one.