October 16, 2025 • 18 mins
If you’ve ever changed jobs, chances are you’ve collected a few different pension pots along the way. Did you know bringing them together is easy and could save you money and time in the long term?
In this episode, our host Iona Bain is joined by Mike Crossley, Head of Workplace Pension Consolidation at L&G, to demystify the process of consolidation.
Together, they tackle the big questions: How easy is it to do? Could lower fees and clearer tracking of your savings make it worthwhile? How do you know if this is the best thing for you to do? Do you need an expert to help?
Mike explains how pension transfers work (often faster and simpler than you might think), the potential long-term benefits, and the key safeguards designed to protect savers.
Whether you’ve got £200 or £200,000 saved, this episode will help you take control of your retirement planning and maybe reduce your future life admin too.
You can watch episodes on L&G’s YouTube channel
And see behind the scenes content on TikTok and Instagram
You can play the podcast and find other useful content on L&G’s website:
https://www.legalandgeneral.com/podcasts/a-little-bit-richer
Iona and her guests share their own personal thoughts and opinions in this podcast. These might be different from L&G’s take on things. They give financial guidance for a UK audience that’s relevant at the time of recording. It’s general best practice, not the kind of personalised advice you’d get from a financial adviser.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Iona Bain (00:01):
Hello, I'm Iona Bain, and welcome to A Little Bit
Richer brought to you by Legal & General. Now today, we're
talking about a topic that might not make your heart
race, but honestly it's the question that I get asked
the most when I'm out and about, talking to people
up and down the country. Should I combine my pension
pots? Yes, today we're talking about pension consolidation. Time and
(00:24):
again I hear things like, " Should I do this? Where
do I even begin? Is it worth the hassle?" So
today, we're going to blast through this and prove that
it's actually easier than you might think because even just
having an awareness of where all your pension pots are
will go a long way to making you feel more
in control of your pension savings. And by doing a
(00:45):
wee big about them now, it's going to give you
a much clearer view of your financial future. So joining
me today to cut through the jargon is Mike Crossley.
He heads up the Workplace Pension Consolidation Team at L&
G, so he's just the man for this job. Welcome,
Mike.
Mike Crossley (01:01):
Thanks.
Iona Bain (01:01):
So let's just set the scene. Why do people end
up having more than one pension pot?
Mike Crossley (01:07):
So loads of people, as they move around between different jobs, they'll
typically get enrolled in a new workplace pension each time they
start a new job. So I've known people who've got
to the age of 30 and had three, four, sometimes
five pensions really early in their career. And of course,
you've also got people who might be self- employed who
might have opened a SIP.
Iona Bain (01:28):
So people can end up with all these pots, and
yet they don't know how easy it is to move all of
them into one place. Talk us through that process. How
straightforward is it?
Mike Crossley (01:40):
Yeah, it's a lot more straightforward than I think a
lot of people assume. I think when you talk to
people about transferring a pension, they assume it's going to
be pages and pages of forms to fill in, but
the reality couldn't be further from that. Most pension providers
now will allow you to request a transfer online, and
most of the time that can go through without a
paper form in sight.
Iona Bain (02:01):
Oh, really? Could you do that theoretically through an app
as well?
Mike Crossley (02:06):
Yeah, most pension providers now will have an app that you
can log into, and often you can start the pension
transfer process there. Now of course, it does vary from
who your old pension provider is, how it works, but
I've known transfers complete in as little as three working
days from that initial online request.
Iona Bain (02:23):
Okay, so that's very encouraging. The question is why should
we bother? We've all got a hell of a lot
to do in our lives, so why add consolidating your pension
pots to that to- do list?
Mike Crossley (02:35):
So the first thing I'll probably say is the clarity
it can give you can be really powerful. If you've got three, four, five different
pensions, it can be tricky to understand how much have you
saved, are your savings on track to give you what
might be a good income in retirement. So bringing them
together can be a really positive first step towards getting
on top of your retirement savings.
Iona Bain (02:56):
So it's a question of not forgetting that you have pension pots, and
therefore being able to maximize what you have much more
effectively?
Mike Crossley (03:05):
Yeah. It's really important not to be one of those
people whose lost an old pension and it can happen
so easily. As people move house and stuff, they forget
to tell their pension provider. And then when you try
and remember, "Oh, what was that pension I had five, 10
years ago," really easy to fall into that trap. So
bringing them together perhaps after you've just changed job and
you've got a new pension is a great way of
(03:26):
keeping on top. And actually, reducing your life admins. You're
not then needing to tell five different pension providers each
time you move.
Iona Bain (03:33):
That's a very good point. Often, when we are reluctant
to do something in the short term, actually we're just
storing up more problems for the longterm. It could actually
save us time in the long run. So younger workers
in particular might end up having quite a lot of
small pension pots, but is there a pot that would
be too small to make all this worthwhile?
Mike Crossley (03:55):
The short answer is no. Even if you've got a
really small pension pot, let's call it £ 200 maybe from
that café job you did for six months, it's still
worth transferring that across, consolidating it into your pensions and
not losing it. Because £ 200 today might not feel like
very much money in a pension, but actually it's going to
(04:15):
be worth bringing that across because that's going to add a small extra bit of
money. And of course, it might grow for another 20 or 30 years and be
worth something a bit more by the time you actually
retire.
Iona Bain (04:25):
And when we're talking about the different values of pension
pots, and you mentioned large pension pots and small pension
pots, how much are we talking here?
Mike Crossley (04:33):
I've seen pensions being transferred worth as little as £ 50 and worth as much as £500,
000 and everything in between. As little rule of thumb,
maybe I'd think of a larger pot being £ 50,000 or
more.
Iona Bain (04:47):
And is the process the same regardless of the value
of your pot?
Mike Crossley (04:50):
Yeah. The underlying process is exactly the same whether it's £50,
50,000, or even £500, 000.
Iona Bain (04:57):
But I imagine if it is higher value, then you're
going to want to take financial advice perhaps?
Mike Crossley (05:03):
Yeah, I think I would certainly be reading the paperwork
a little more closely on one of those larger pots
than a small one.
Iona Bain (05:09):
But also, is there a reason to transfer your pensions
into one pot because of how your investments might perform,
or maybe because you can get lower fees?
Mike Crossley (05:18):
So if you've got different pensions, it's really worth having
a look at the different fees that you might be paying on them
because what might look like a really small difference, like 0.
5%, can actually add up to something really substantial over
the years. So checking that difference before you transfer is
definitely on the list. Aside from the fees, it's also
(05:40):
worth understanding that different pensions could be invested in different
ways. So each pension you've got via your employer will have
probably gone into a default fund unless you've chosen your
own funds under there. So as well as differences between
default funds in different pension schemes, there's also different ranges
of investments that you can choose if you're interested in
doing it yourself.
Iona Bain (06:01):
So you can definitely take more control of your pension
and how it's invested if you want to?
Mike Crossley (06:06):
Absolutely.
Iona Bain (06:07):
And also, if you're a bit younger, could you choose
maybe to have your pension invested in a more adventurous
way?
Mike Crossley (06:15):
Yeah. Many pension providers will try and have their default
fund allowing for that. So they'll usually be set up
to give you growth in your early years and want
more protection as you get closer to retirement. But if
you feel confident and you know what you're doing, you can absolutely
navigate through the fund range available and choose something that's
appropriate for your appetite for risk and growth.
Iona Bain (06:36):
That's good to know. And what do competitive fees look like on
a pension?
Mike Crossley (06:41):
Most pension providers will charge on a percentage basis of
the total value of the pension pot. Sometimes it splits
into what's known as an annual management charge, the cost
of running the pension, which is separate to a fund
management charge, which is the cost of the underlying investment.
Other providers will just have a single all- in fee
(07:02):
that combines the two. So listeners might see differences in
the fee structure between their different providers, but of course
it's quite simple to add the two if they are
separate and compare them to one overall fee. Now, what's
competitive. Workplace pensions are actually capped, so they shouldn't ever
cost more than 0. 7%. But often, they'll be less than
(07:24):
that, particularly if you've worked for a big employer who
might have negotiated a much lower fee even you'd typically
be able to get if you came to a pension
provider directly. So sometimes I can be as low as 0. 2%
for all of the fees combined. Now, if you think
about that then, perhaps you've got one that's 0. 7% and
another one that's 0. 2, and you're starting to think, "
(07:47):
Well, does that make much difference?" Let me give you
an idea. So if you've got about 25, 30 years away
from your retirement and you've got a £10, 000 pot, moving that
from a 0. 7% to a 0.2% one could make as
much difference as £ 2000 by the time you get to retire,
(08:07):
assuming the underlying investment performance is the same. So it
can make a substantial difference.
Iona Bain (08:12):
That could pay for a holiday.
Mike Crossley (08:13):
It could, indeed.
Iona Bain (08:14):
A very nice one. So what about people who are
not sure if they have an old pension or they
don't know how much might be in there? Where can
they go to find out more?
Mike Crossley (08:23):
So the first thing is to have a look through your
old paperwork and see if you can find any old
statements with policy numbers on or whatever else. If you
can find those, you've made a really, really good first
step. If you haven't got any even little traces of
a pension, but you think it might be there, the
government actually has a free tracing service that's available online.
So you can go on there, search for your employer
(08:46):
and see who that pension might be with. Private pension
providers sometimes offer pension tracing services that can help you
do that as well.
Iona Bain (08:53):
So even if you can't remember what the name of
the pension provider is, so long as you can remember
who you worked for, that could just give you enough
of a clue to go hunting for that lost pension?
Mike Crossley (09:03):
Absolutely.
Iona Bain (09:04):
So that's really good to know. And are there some
types of pensions that you wouldn't transfer?
Mike Crossley (09:09):
Yeah, this is a great point. So if you've been working in the public sector
and you've maybe got something like an NHS, Armed Forces,
or civil service pension that might be a defined benefit or
career average type pension, those work fundamentally different to a
defined contribution you might have got through a private company.
So some of those pensions, you won't even be able
(09:31):
to transfer even if you wanted to.
Iona Bain (09:33):
Right. So it's not even an option?
Mike Crossley (09:35):
Most of the time, it's not even an option. Some
defined benefit schemes will let you, but you do need
to take advice from a specially- trained financial advisor. So
that's off the cards for most people, it won't normally
be in your interest to do that.
Iona Bain (09:48):
But if you have a defined contribution pension, then it
is something that's still worth considering? Or are there certain
situations where even then, you have to be a bit careful?
Mike Crossley (09:56):
Yeah, I think that's a good way of thinking about
it. Most of the time, particularly if your pensions been
set up in maybe the last five or 10 years,
it's unlikely to have any sort of special benefits that
you might lose on transfer. But some older defined contribution
pensions have what we refer to as safeguarded benefits attached
to them. So this could be something like a guaranteed
(10:17):
annuity rate that you get more when you retire, or
it might even be invested in a with- profits fund
where there could be a significant penalty for not seeing
it through to maturity. Now, if you've got any doubt
at all as to whether you might have any of
those old or special features, you can always call your
provider and check. They'll always tell you if that's the case.
Iona Bain (10:36):
That's a good piece of advice. If in doubt, find
out. Now, Mike, you've promised that this is actually a
lot more straightforward than people think it might be, so
I'm going to hold you to that. Talk us through
what the transfer process actually involves, and what you need to look out for, and what you need to bear in mind.
Mike Crossley (10:53):
So if you've got an old statement in your hand
for one of your old pensions and you've got the
policy number, the first thing you might do is go
on the provider's website, see if you can log in.
Check the value, check the charges, have a look and
see if there's any sort of special features there. Once
you've done that and decided that transferring is the right thing
to do, go to your new pension provider's web portal
(11:14):
or app and see if you can start the process online.
That's usually going to be the simplest way. Most of
the time, all you'll need is the name of your
old provider and a policy number, complete the online form,
read all the risk warnings carefully of course. And what
then happens is lots of stuff behind the scenes which
you don't necessarily need to worry about, but can be
useful to understand. So your new pension provider will then
(11:38):
contact your old provider on your behalf. If the old
provider goes, " Yeah, we've got a pension for you," what
they'll do is they'll actually sell down any investments that
you're holding in that old pension scheme. Once it's in
cash, they'll send it across to your new provider. Your
new provider will usually automatically invest it in line with
how your pension's already invested, whether that's the default fund
(11:59):
or something that you've chosen yourself. So it can be
very, very straightforward in terms of it coming across and
you might just get a little SMS after five days
or a couple of weeks saying it's all done. You
log in and you see it there.
Iona Bain (12:12):
That's very reassuring because I think a lot of us
do believe that it's going to involve, as you were
saying before, lots and lots of paperwork and it was
going to take a long, long time, but that might
not be the case.
Mike Crossley (12:22):
Now, it can really vary by who your provider is.
There are still some old school providers out there who
insist on having a paper form and it will take
a little bit longer. But what I'd probably say is
persist with it, don't be put off by that big
envelope and long paperwork because once you've done it, you only have to do it once, and then your pensions are together.
Iona Bain (12:43):
True. You've just got to embrace the admin, Mike, that's the
message here. And also, I think people will be thinking, "
Actually, I don't know whether it's a good idea for
me to transfer my pension across." Is there any kind
of safeguard in place there to ensure that people are
not making the wrong decision here?
Mike Crossley (13:01):
Yeah, pension providers definitely put some safeguards in there to
stop you doing something really reckless or that might not
be in your interest by accident. So for example, if
you've got one of those old pension policies and it's
got a guaranteed annuity rate or something like that, as
soon as your new provider goes through to your old
provider, the old provider will raise a flag and go, "
(13:23):
Sorry, there's a safeguarded benefit here. This pension can't be
transferred without advice," and they'll knock it back to your
new provider who will probably drop you a message or give
you a call and let you know. There's some good
safeguards in there to stop people making a really big mistake.
Iona Bain (13:38):
That comes as a relief I'm sure to lots of
folks listening and watching. And the other question is does
it cost anything?
Mike Crossley (13:44):
Now, transferring your pension is normally free with most providers.
So you shouldn't be charted either by your old provider
for transferring out, or from your new provider for transferring
in.
Iona Bain (13:56):
And people might be wondering if they need to get
financial advice in order to transfer their pension. Is that
the case?
Mike Crossley (14:04):
The simple answer here is that financial advice can be very worthwhile, but
it's probably not relevant for most people just thinking about
bringing their old pension pots together, particularly if all you've
got are five or six quite low value pots from
your early career. Now, if you've got a really big
pot where the difference in charges is going to make
a big difference or you're concerned that maybe you have
(14:26):
got some special benefits, but you can work out whether
they're worth keeping or whether you should transfer, a financial
advisor can be really, really helpful in helping you make
sense of all that and make a sound decision. You just
need to be aware that they will usually charge for
their services.
Iona Bain (14:42):
I can imagine, Mike, that pension providers have really had
to up their game in terms of making it easier
for people to consolidate their pensions because gone are the
days when people would have a job for many, many
years, if not for life. And therefore, this issue of
people having lots of pension pots and not really knowing
what to do with them, that's something the pensions industry
(15:02):
has had to really respond to, hasn't it?
Mike Crossley (15:04):
That's right and so much has changed around this in
the last 10 years. Lots of that's been driven by
digital, so being able to do a lot more stuff
via apps and online portals. But you're absolutely right, there's
a lot more pension pots out there, lots more people
wanting to do it. And the really nice thing actually
is that the people who have completed it are often surprised
at just how easy it was. I have seen people
(15:27):
transfer sometimes seven, eight, nine different pensions and they've been
amazed at the fact they could just do it all
online and how quickly it's all come together.
Iona Bain (15:36):
Yeah, I can imagine that must feel very satisfying as well,
not thinking that there are all these different pension pots
in all these different places, and just knowing it's all
there in one place. I definitely have that kind of
personality where I like that kind of order in my
life and I'm sure lots of other people are the
same.
Mike Crossley (15:51):
Yeah.
Iona Bain (15:51):
And people watching and listening might have heard of something
called the Pensions Dashboard and they'll be thinking, " Well, when
that comes along, I'll be able to see all my
pensions in one place." So why should people still be
thinking about pensions consolidation even if or when that happens?
Mike Crossley (16:06):
Yeah, this is a great question. So we're expecting pension
dashboards to be available from late 2026 and that will
be a fantastic resource for people to see all their
pensions in one place, and it should give you real
clarity on how much you've saved and where is it.
However, it doesn't mean that bringing your pensions together isn't
worthwhile because there's still those factors like the differences in
(16:28):
charges potentially or the difference in investment. And of course, once
you can bring them all into one place in a
single pension, it can still be better for clarity and
planning for the future.
Iona Bain (16:38):
So you've given us a really helpful whistle- stop tour
there, Mike. I wonder if we can finish off with
your top three tips for anyone whose thinking about moving
their pension savings?
Mike Crossley (16:50):
Number one, do not be put off by the potential
hassle. It is going to be easier than you think
and you'll feel a lot better when it's done. Number
two, take those few minutes before you press go just
to read through, check the charges in particular because that can
make a difference especially when it's over a 20 or 30- year
period to retirement. And the last one is look out
(17:13):
for those scammers. So if someone calls you out the
blue or starts offering you incentives to transfer, you just
need to ask yourself, " Why is this person so keen
to make me transfer?" So just pause, think about it,
and if it looks like it might be too good
to be true, it probably is.
Iona Bain (17:29):
That is absolutely excellent advice, Mike. Thank you very much.
Mike Crossley (17:33):
Thank you.
Iona Bain (17:35):
Well, I hope that's helped clear the muddy waters on
pension consolidation for you and inspired you to take on
a bit of life admin. If this episode has made
you feel empowered to get a hold of your pension
savings, then why not share the podcast and help others
get a little bit richer too? Next time, we're breaking
down tax with Accountant Tim Paul and lots of easy
(17:57):
wins to help you legally reduce the amount of tax
deducted from your salary. This podcast is brought to you
by L& G. You can keep up with the show
on YouTube, TikTok, and Instagram @legalandgeneral. And if you have a question
or a topic you'd like answered on the show, then
you can get in touch on our socials. We'd love
to hear from you. Until next time, thanks for listening,
(18:19):
and see you soon.
Hello, I'm Iona Bain, and welcome to A Little Bit
Richer brought to you by Legal & General. Now today, we're
talking about a topic that might not make your heart
race, but honestly it's the question that I get asked
the most when I'm out and about, talking to people
up and down the country. Should I combine my pension
pots? Yes, today we're talking about pension consolidation. Time and
(00:24):
again I hear things like, " Should I do this? Where
do I even begin? Is it worth the hassle?" So
today, we're going to blast through this and prove that
it's actually easier than you might think because even just
having an awareness of where all your pension pots are
will go a long way to making you feel more
in control of your pension savings. And by doing a
(00:45):
wee big about them now, it's going to give you
a much clearer view of your financial future. So joining
me today to cut through the jargon is Mike Crossley.
He heads up the Workplace Pension Consolidation Team at L&
G, so he's just the man for this job. Welcome,
Mike.
Mike Crossley (01:01):
Thanks.
Iona Bain (01:01):
So let's just set the scene. Why do people end
up having more than one pension pot?
Mike Crossley (01:07):
So loads of people, as they move around between different jobs, they'll
typically get enrolled in a new workplace pension each time they
start a new job. So I've known people who've got
to the age of 30 and had three, four, sometimes
five pensions really early in their career. And of course,
you've also got people who might be self- employed who
might have opened a SIP.
Iona Bain (01:28):
So people can end up with all these pots, and
yet they don't know how easy it is to move all of
them into one place. Talk us through that process. How
straightforward is it?
Mike Crossley (01:40):
Yeah, it's a lot more straightforward than I think a
lot of people assume. I think when you talk to
people about transferring a pension, they assume it's going to
be pages and pages of forms to fill in, but
the reality couldn't be further from that. Most pension providers
now will allow you to request a transfer online, and
most of the time that can go through without a
paper form in sight.
Iona Bain (02:01):
Oh, really? Could you do that theoretically through an app
as well?
Mike Crossley (02:06):
Yeah, most pension providers now will have an app that you
can log into, and often you can start the pension
transfer process there. Now of course, it does vary from
who your old pension provider is, how it works, but
I've known transfers complete in as little as three working
days from that initial online request.
Iona Bain (02:23):
Okay, so that's very encouraging. The question is why should
we bother? We've all got a hell of a lot
to do in our lives, so why add consolidating your pension
pots to that to- do list?
Mike Crossley (02:35):
So the first thing I'll probably say is the clarity
it can give you can be really powerful. If you've got three, four, five different
pensions, it can be tricky to understand how much have you
saved, are your savings on track to give you what
might be a good income in retirement. So bringing them
together can be a really positive first step towards getting
on top of your retirement savings.
Iona Bain (02:56):
So it's a question of not forgetting that you have pension pots, and
therefore being able to maximize what you have much more
effectively?
Mike Crossley (03:05):
Yeah. It's really important not to be one of those
people whose lost an old pension and it can happen
so easily. As people move house and stuff, they forget
to tell their pension provider. And then when you try
and remember, "Oh, what was that pension I had five, 10
years ago," really easy to fall into that trap. So
bringing them together perhaps after you've just changed job and
you've got a new pension is a great way of
(03:26):
keeping on top. And actually, reducing your life admins. You're
not then needing to tell five different pension providers each
time you move.
Iona Bain (03:33):
That's a very good point. Often, when we are reluctant
to do something in the short term, actually we're just
storing up more problems for the longterm. It could actually
save us time in the long run. So younger workers
in particular might end up having quite a lot of
small pension pots, but is there a pot that would
be too small to make all this worthwhile?
Mike Crossley (03:55):
The short answer is no. Even if you've got a
really small pension pot, let's call it £ 200 maybe from
that café job you did for six months, it's still
worth transferring that across, consolidating it into your pensions and
not losing it. Because £ 200 today might not feel like
very much money in a pension, but actually it's going to
(04:15):
be worth bringing that across because that's going to add a small extra bit of
money. And of course, it might grow for another 20 or 30 years and be
worth something a bit more by the time you actually
retire.
Iona Bain (04:25):
And when we're talking about the different values of pension
pots, and you mentioned large pension pots and small pension
pots, how much are we talking here?
Mike Crossley (04:33):
I've seen pensions being transferred worth as little as £ 50 and worth as much as £500,
000 and everything in between. As little rule of thumb,
maybe I'd think of a larger pot being £ 50,000 or
more.
Iona Bain (04:47):
And is the process the same regardless of the value
of your pot?
Mike Crossley (04:50):
Yeah. The underlying process is exactly the same whether it's £50,
50,000, or even £500, 000.
Iona Bain (04:57):
But I imagine if it is higher value, then you're
going to want to take financial advice perhaps?
Mike Crossley (05:03):
Yeah, I think I would certainly be reading the paperwork
a little more closely on one of those larger pots
than a small one.
Iona Bain (05:09):
But also, is there a reason to transfer your pensions
into one pot because of how your investments might perform,
or maybe because you can get lower fees?
Mike Crossley (05:18):
So if you've got different pensions, it's really worth having
a look at the different fees that you might be paying on them
because what might look like a really small difference, like 0.
5%, can actually add up to something really substantial over
the years. So checking that difference before you transfer is
definitely on the list. Aside from the fees, it's also
(05:40):
worth understanding that different pensions could be invested in different
ways. So each pension you've got via your employer will have
probably gone into a default fund unless you've chosen your
own funds under there. So as well as differences between
default funds in different pension schemes, there's also different ranges
of investments that you can choose if you're interested in
doing it yourself.
Iona Bain (06:01):
So you can definitely take more control of your pension
and how it's invested if you want to?
Mike Crossley (06:06):
Absolutely.
Iona Bain (06:07):
And also, if you're a bit younger, could you choose
maybe to have your pension invested in a more adventurous
way?
Mike Crossley (06:15):
Yeah. Many pension providers will try and have their default
fund allowing for that. So they'll usually be set up
to give you growth in your early years and want
more protection as you get closer to retirement. But if
you feel confident and you know what you're doing, you can absolutely
navigate through the fund range available and choose something that's
appropriate for your appetite for risk and growth.
Iona Bain (06:36):
That's good to know. And what do competitive fees look like on
a pension?
Mike Crossley (06:41):
Most pension providers will charge on a percentage basis of
the total value of the pension pot. Sometimes it splits
into what's known as an annual management charge, the cost
of running the pension, which is separate to a fund
management charge, which is the cost of the underlying investment.
Other providers will just have a single all- in fee
(07:02):
that combines the two. So listeners might see differences in
the fee structure between their different providers, but of course
it's quite simple to add the two if they are
separate and compare them to one overall fee. Now, what's
competitive. Workplace pensions are actually capped, so they shouldn't ever
cost more than 0. 7%. But often, they'll be less than
(07:24):
that, particularly if you've worked for a big employer who
might have negotiated a much lower fee even you'd typically
be able to get if you came to a pension
provider directly. So sometimes I can be as low as 0. 2%
for all of the fees combined. Now, if you think
about that then, perhaps you've got one that's 0. 7% and
another one that's 0. 2, and you're starting to think, "
(07:47):
Well, does that make much difference?" Let me give you
an idea. So if you've got about 25, 30 years away
from your retirement and you've got a £10, 000 pot, moving that
from a 0. 7% to a 0.2% one could make as
much difference as £ 2000 by the time you get to retire,
(08:07):
assuming the underlying investment performance is the same. So it
can make a substantial difference.
Iona Bain (08:12):
That could pay for a holiday.
Mike Crossley (08:13):
It could, indeed.
Iona Bain (08:14):
A very nice one. So what about people who are
not sure if they have an old pension or they
don't know how much might be in there? Where can
they go to find out more?
Mike Crossley (08:23):
So the first thing is to have a look through your
old paperwork and see if you can find any old
statements with policy numbers on or whatever else. If you
can find those, you've made a really, really good first
step. If you haven't got any even little traces of
a pension, but you think it might be there, the
government actually has a free tracing service that's available online.
So you can go on there, search for your employer
(08:46):
and see who that pension might be with. Private pension
providers sometimes offer pension tracing services that can help you
do that as well.
Iona Bain (08:53):
So even if you can't remember what the name of
the pension provider is, so long as you can remember
who you worked for, that could just give you enough
of a clue to go hunting for that lost pension?
Mike Crossley (09:03):
Absolutely.
Iona Bain (09:04):
So that's really good to know. And are there some
types of pensions that you wouldn't transfer?
Mike Crossley (09:09):
Yeah, this is a great point. So if you've been working in the public sector
and you've maybe got something like an NHS, Armed Forces,
or civil service pension that might be a defined benefit or
career average type pension, those work fundamentally different to a
defined contribution you might have got through a private company.
So some of those pensions, you won't even be able
(09:31):
to transfer even if you wanted to.
Iona Bain (09:33):
Right. So it's not even an option?
Mike Crossley (09:35):
Most of the time, it's not even an option. Some
defined benefit schemes will let you, but you do need
to take advice from a specially- trained financial advisor. So
that's off the cards for most people, it won't normally
be in your interest to do that.
Iona Bain (09:48):
But if you have a defined contribution pension, then it
is something that's still worth considering? Or are there certain
situations where even then, you have to be a bit careful?
Mike Crossley (09:56):
Yeah, I think that's a good way of thinking about
it. Most of the time, particularly if your pensions been
set up in maybe the last five or 10 years,
it's unlikely to have any sort of special benefits that
you might lose on transfer. But some older defined contribution
pensions have what we refer to as safeguarded benefits attached
to them. So this could be something like a guaranteed
(10:17):
annuity rate that you get more when you retire, or
it might even be invested in a with- profits fund
where there could be a significant penalty for not seeing
it through to maturity. Now, if you've got any doubt
at all as to whether you might have any of
those old or special features, you can always call your
provider and check. They'll always tell you if that's the case.
Iona Bain (10:36):
That's a good piece of advice. If in doubt, find
out. Now, Mike, you've promised that this is actually a
lot more straightforward than people think it might be, so
I'm going to hold you to that. Talk us through
what the transfer process actually involves, and what you need to look out for, and what you need to bear in mind.
Mike Crossley (10:53):
So if you've got an old statement in your hand
for one of your old pensions and you've got the
policy number, the first thing you might do is go
on the provider's website, see if you can log in.
Check the value, check the charges, have a look and
see if there's any sort of special features there. Once
you've done that and decided that transferring is the right thing
to do, go to your new pension provider's web portal
(11:14):
or app and see if you can start the process online.
That's usually going to be the simplest way. Most of
the time, all you'll need is the name of your
old provider and a policy number, complete the online form,
read all the risk warnings carefully of course. And what
then happens is lots of stuff behind the scenes which
you don't necessarily need to worry about, but can be
useful to understand. So your new pension provider will then
(11:38):
contact your old provider on your behalf. If the old
provider goes, " Yeah, we've got a pension for you," what
they'll do is they'll actually sell down any investments that
you're holding in that old pension scheme. Once it's in
cash, they'll send it across to your new provider. Your
new provider will usually automatically invest it in line with
how your pension's already invested, whether that's the default fund
(11:59):
or something that you've chosen yourself. So it can be
very, very straightforward in terms of it coming across and
you might just get a little SMS after five days
or a couple of weeks saying it's all done. You
log in and you see it there.
Iona Bain (12:12):
That's very reassuring because I think a lot of us
do believe that it's going to involve, as you were
saying before, lots and lots of paperwork and it was
going to take a long, long time, but that might
not be the case.
Mike Crossley (12:22):
Now, it can really vary by who your provider is.
There are still some old school providers out there who
insist on having a paper form and it will take
a little bit longer. But what I'd probably say is
persist with it, don't be put off by that big
envelope and long paperwork because once you've done it, you only have to do it once, and then your pensions are together.
Iona Bain (12:43):
True. You've just got to embrace the admin, Mike, that's the
message here. And also, I think people will be thinking, "
Actually, I don't know whether it's a good idea for
me to transfer my pension across." Is there any kind
of safeguard in place there to ensure that people are
not making the wrong decision here?
Mike Crossley (13:01):
Yeah, pension providers definitely put some safeguards in there to
stop you doing something really reckless or that might not
be in your interest by accident. So for example, if
you've got one of those old pension policies and it's
got a guaranteed annuity rate or something like that, as
soon as your new provider goes through to your old
provider, the old provider will raise a flag and go, "
(13:23):
Sorry, there's a safeguarded benefit here. This pension can't be
transferred without advice," and they'll knock it back to your
new provider who will probably drop you a message or give
you a call and let you know. There's some good
safeguards in there to stop people making a really big mistake.
Iona Bain (13:38):
That comes as a relief I'm sure to lots of
folks listening and watching. And the other question is does
it cost anything?
Mike Crossley (13:44):
Now, transferring your pension is normally free with most providers.
So you shouldn't be charted either by your old provider
for transferring out, or from your new provider for transferring
in.
Iona Bain (13:56):
And people might be wondering if they need to get
financial advice in order to transfer their pension. Is that
the case?
Mike Crossley (14:04):
The simple answer here is that financial advice can be very worthwhile, but
it's probably not relevant for most people just thinking about
bringing their old pension pots together, particularly if all you've
got are five or six quite low value pots from
your early career. Now, if you've got a really big
pot where the difference in charges is going to make
a big difference or you're concerned that maybe you have
(14:26):
got some special benefits, but you can work out whether
they're worth keeping or whether you should transfer, a financial
advisor can be really, really helpful in helping you make
sense of all that and make a sound decision. You just
need to be aware that they will usually charge for
their services.
Iona Bain (14:42):
I can imagine, Mike, that pension providers have really had
to up their game in terms of making it easier
for people to consolidate their pensions because gone are the
days when people would have a job for many, many
years, if not for life. And therefore, this issue of
people having lots of pension pots and not really knowing
what to do with them, that's something the pensions industry
(15:02):
has had to really respond to, hasn't it?
Mike Crossley (15:04):
That's right and so much has changed around this in
the last 10 years. Lots of that's been driven by
digital, so being able to do a lot more stuff
via apps and online portals. But you're absolutely right, there's
a lot more pension pots out there, lots more people
wanting to do it. And the really nice thing actually
is that the people who have completed it are often surprised
at just how easy it was. I have seen people
(15:27):
transfer sometimes seven, eight, nine different pensions and they've been
amazed at the fact they could just do it all
online and how quickly it's all come together.
Iona Bain (15:36):
Yeah, I can imagine that must feel very satisfying as well,
not thinking that there are all these different pension pots
in all these different places, and just knowing it's all
there in one place. I definitely have that kind of
personality where I like that kind of order in my
life and I'm sure lots of other people are the
same.
Mike Crossley (15:51):
Yeah.
Iona Bain (15:51):
And people watching and listening might have heard of something
called the Pensions Dashboard and they'll be thinking, " Well, when
that comes along, I'll be able to see all my
pensions in one place." So why should people still be
thinking about pensions consolidation even if or when that happens?
Mike Crossley (16:06):
Yeah, this is a great question. So we're expecting pension
dashboards to be available from late 2026 and that will
be a fantastic resource for people to see all their
pensions in one place, and it should give you real
clarity on how much you've saved and where is it.
However, it doesn't mean that bringing your pensions together isn't
worthwhile because there's still those factors like the differences in
(16:28):
charges potentially or the difference in investment. And of course, once
you can bring them all into one place in a
single pension, it can still be better for clarity and
planning for the future.
Iona Bain (16:38):
So you've given us a really helpful whistle- stop tour
there, Mike. I wonder if we can finish off with
your top three tips for anyone whose thinking about moving
their pension savings?
Mike Crossley (16:50):
Number one, do not be put off by the potential
hassle. It is going to be easier than you think
and you'll feel a lot better when it's done. Number
two, take those few minutes before you press go just
to read through, check the charges in particular because that can
make a difference especially when it's over a 20 or 30- year
period to retirement. And the last one is look out
(17:13):
for those scammers. So if someone calls you out the
blue or starts offering you incentives to transfer, you just
need to ask yourself, " Why is this person so keen
to make me transfer?" So just pause, think about it,
and if it looks like it might be too good
to be true, it probably is.
Iona Bain (17:29):
That is absolutely excellent advice, Mike. Thank you very much.
Mike Crossley (17:33):
Thank you.
Iona Bain (17:35):
Well, I hope that's helped clear the muddy waters on
pension consolidation for you and inspired you to take on
a bit of life admin. If this episode has made
you feel empowered to get a hold of your pension
savings, then why not share the podcast and help others
get a little bit richer too? Next time, we're breaking
down tax with Accountant Tim Paul and lots of easy
(17:57):
wins to help you legally reduce the amount of tax
deducted from your salary. This podcast is brought to you
by L& G. You can keep up with the show
on YouTube, TikTok, and Instagram @legalandgeneral. And if you have a question
or a topic you'd like answered on the show, then
you can get in touch on our socials. We'd love
to hear from you. Until next time, thanks for listening,
(18:19):
and see you soon.
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