Benefits of transferring pensions

4 reasons why you should try consolidating pensions

In the UK, the average worker is likely to have 11 jobs over the course of their professional life. That's a lot of workplace pension pots to manage. If you have multiple pension pots, it is challenging to know how much you have saved for retirement and to plan accordingly.

Luckily, you can consolidate your pensions into one pot, meaning you’ll be able to get a better overview of what you have saved and how much more you might need to save before you retire.

What is pension consolidation?

First things first, it’s worth explaining what pension consolidation is. Simply put, it’s when you move your existing old pension pots and combine them into one single pot (pension fund). Consolidating is also known as ‘transferring’ or ‘combining’ pensions (we’ll refer to all three terms here).

What are the benefits of consolidating your pension?

Here are four reasons why you should consider transferring your pension funds into one pot:

1: It’s easier to manage one pension pot

Keeping track of multiple pension pots can be time-consuming. In fact, in the UK alone, it's estimated that there is around £20 billion in unclaimed pensions, affecting 1.6 million pension pots across the country.

By transferring your pension, you’ll be able to see your savings more clearly, since you’ll only have one account to manage.

Some pension providers will send you just one letter annually, so it is not easy to assess how your pension is doing throughout the year. It's harder if you have multiple old pensions and have to keep track of more than one of these letters.

If you set up a sustainable pension with CIRCA5000, you’ll be able to keep track of your funds whenever you want to in the app.

2: You’ll have more control over your finances

A pension is the largest sum of savings that most people will have in their lifetime. The key to a comfortable retirement is planning ahead. If you have your pensions combined into one pot, you can easily assess whether you are on track for your retirement goals.

3: Potential to reduce the fees you pay

When you have multiple pensions floating around, it’s hard to keep track of the fees each pension provider charges you. When your pensions are combined, you only need to keep up with one provider's fees and can easily assess if the fees you are paying are high or low.

4: Know where your pension is invested

This is where we come in: our mission at CIRCA5000 is to invest in companies that change the world for the better – without compromising on profit. When you open a pension with us, rest assured that we’ll always look for the best-in-class funds that don’t have a negative impact on our society or planet. What’s more, you can see, control and change where your pension is sustainably invested.

Things to consider when combining pensions

When transferring your pension funds into one pot, you may need to think about:

  • The type of pension you have: You’ll need to find out whether you have a defined contribution pension or a defined benefit pension (you can find out more about different pension types in our guide). If you have a defined contribution pension, the amount you have depends on how much you’ve paid into the pension, how the investments have performed and the fees you’ve paid. These pensions are usually easier to transfer. Defined benefit pensions work a little differently: they often come with a guaranteed retirement income based on your earnings and years of employment.
  • Current pension fees: If you find that you have a defined contribution pension with your previous workplace(s), it's worth checking the fees you are currently paying. If you have multiple old workplace pension pots, you might be paying higher fees for some pots and lower for others. You may decide you just want to transfer the pots with high fees to a new pension.
  • Exit fees: Some pension schemes apply exit charges to anyone wishing to transfer their funds out, so it’s worth checking whether or not this is the case with your pension provider. Today, charges are becoming rare, and they won’t usually be more than 1% of your savings.

Why choose a CIRCA5000 pension?

Our pensions are designed for investors who care about their own future and the future of the planet. Our focus is on impact investing, and we provide a range of options to help our customers grow their money sustainably.

We are a certified B Corp, investing in companies that are actively trying to build a better future. These companies are helping to fight climate change and preserve our natural resources; they’re strengthening cyber security and creating socio-economic equality by working towards better health and educational outcomes. Find out more about our mission here.

And that’s not all. There are other benefits, including:

  • Automatic tax relief of 20%
  • Flexibility around how you contribute – you can either do it in one go or as a monthly top up
  • Keep track of your fund and its performance
  • Access to investing resources and pension information
  • Quick and easy set-up through the CIRCA5000 app

How to transfer your pension to CIRCA5000

Consolidating your pension is easier than you think with CIRCA5000.

Just take the following example from one of our customers, Donna, who’s based in Liverpool.

Donna had lots of jobs and changes of address. She used our free tracing service to reclaim £40,000 in lost pensions for her retirement fund, consolidating these savings into one pot. Donna was able to monitor her funds using the CIRCA5000 app and properly plan for her retirement. She told us: "Honestly…[the app] was just so simple to use. I’ve worked with computers for years, but I would call myself a technophobe. But the app was so easy to use – really easy to keep track of – and I just loved it."

To get started, you’ll need to open a CIRCA5000 pension.

Once you’ve opened a pension with us, follow the steps below in the app to transfer your pension. For more information, visit our transferring pensions page.

  • In the app, click ‘Transfer In.’ Remember, you’re choosing to transfer the pensions we might find to CIRCA5000.
  • Enter your existing pension details. If you don’t know these, don’t worry. You can tell us the name of the company you worked at, and we’ll find your old workplace pensions – we have a dedicated tracing team who can do this for you. If you know your dates of employment, let the team know; this can be used to source your pension information.
  • We’ll reach out to your providers or past employers. Please note that this can take a few weeks. We may also need you to sign a letter of authority so that we can act on your behalf. It’s really straightforward, and we’ll keep you updated throughout the process.
  • See your pension details in the app. Once we’ve found your pensions, you’ll be able to view them all in one place and combine them into a single CIRCA5000 pension.

Our customer service team are on hand to help if you have any questions. Just email them at hi@circa5000.com or get support using the in-app chat feature. Alternatively, you can visit our support page.

Disclaimer

When you invest, your capital is at risk. You should carefully consider whether opening a CIRCA5000 pension or transferring your old pensions is right for you. Please note that tax rules and reliefs depend on your personal circumstances and may change. CIRCA5000 does not provide any financial or tax advice, and you are responsible for your own tax reliefs/payments. This article does not represent financial advice. Your investments and the income from them can go down as well as up. It is sensible to seek independent financial advice if your pension is worth £30,000 or more.

Important information - Investments can go down in value as well as up, so you can get back less than you invest. The information on this page isn't investment advice. If you're not sure if an investment is right for you, please seek advice. Tax rules can change and depend on individual circumstances.