AD | Should I Combine All Of My Pension Pots?
*Some of these links are affiliate which means if you sign up through my link I get a small commission which helps me out a lot
If there’s one thing I have learnt in my personal finance blogging journey, it’s that it’s important to start saving for the future as early as possible. And even though I can’t claim my state pension until 2066 (I’ve got a long way to go I know!) I actually started saving towards retirement 3 years ago when I was 18.
What Is A Pension?
Pensions can be made up of three sources, including:
- Workplace pension – This is where you make a contribution from your wages, and your employer also contributes to your workplace pension. Most employers offer a workplace pension now, and it’s common to start a new pension at each workplace. With people now having an average of 11 different jobs in the course of their careers, this can result in a lot of pots!
- State pension – This is made up of your National Insurance contributions over the years. If you pay the full 35 years of National Insurance, you are expected to have a pension of up to £8,767.20 a year (2019/20 figures) – which can be a huge drop in income as well as a big shock for some people.
- Private pension – This is something you have set up yourself, and you can receive tax relief on private pension contributions worth up to 100% of your annual earnings to a maximum of £40,000.
How Can I Combine My Pensions?
I came across a great company called PensionBee, who combine all of the pension pots you have contributed to in the past. The fact that they had an app that I could access whenever I wanted to see how my pension was performing is what led me to choose them.
Joining PensionBee is completely free, and they don’t charge you to transfer your old pensions or to make contributions or withdrawals (unless you withdraw everything within 12 months of joining them).
However, they do automatically take a management fee of between 0.50% and 0.95%, depending on the plan you choose. I am on the Tailored plan, which is customised according to your age, and moves your money into safer assets as you get older. There are seven PensionBee plans to suit different needs, and you can change your plan at any time for free.
What Are The Benefits Of PensionBee?
I wanted somewhere relatively low-risk to store my money, and after looking into the risks of PensionBee I found that they don’t manage your money directly, it’s done by investors, including some of the biggest in the world like BlackRock and State Street. This means that if anything did happen to PensionBee, your money would be safe as it’s with investors. They are also rated 4.6*/5* on TrustPilot, and even though I haven’t ever had any problems uisng them, I found the whole process of combining my pensions as simple and streamline as possible.
Once I had signed up with PensionBee, I sent over the details of my existing pension policies, my name, address and account numbers to their wonderful Bee Keepers who did all of the work for me. If you don’t remember who your old providers are, you can tell them about your old employers and they will check their database to help you find your old pensions (because some of us may struggle to find our old paperwork!).
PensionBee can then begin buzzing behind the scenes to contact your old pension providers and start the process of moving your money into your new pension (honey) pot. I found that they kept me fully updated throughout this process and I always knew what was happening as soon as they knew.
In 2020, my aim is to contribute more towards my pension and start to plan effectively for the future including looking into what I should be saving towards my retirement now in order to be in control of my future.
This post was written in collaboration with PensionBee, however all opinions are my own. PensionBee is authorised and regulated by the Financial Conduct Authority. Nothing in this post should be taken as financial advice. As with all pensions, your capital is at risk and your pension can go down as well as up. You may want to consider advice from a qualified IFA.