Pension news: Should I consolidate my pension fund? You could double your savings

Pension funds offer Britons a way to save enough money to live comfortably on in retirement.

The state pension is a fund that Britons pay into during their lives by paying national insurance contributions, and they can claim it after reaching state retirement age.

Private pensions, on the other hand, are provided to Britons by their employers via various schemes.

Is it possible to combine your pensions into one pot, and is this wise?

Can you combine your pensions?

You can combine your old private pensions from different providers, which could make it easier to keep track of them all.

There are various providers who claim to be able to consolidate your pensions, such as PensionBee.

Should you combine your pensions?

According to Which.co.uk: “If a 35-year-old with a £10,000 pension pot invests until 65 in a fund that achieves fiver per cent annual investment growth, but charges two per cent a year, the pot will be worth £23,720.

The same £10,000 invested in a fund that achieves seven per cent annual investment growth, with a 1.5 per cent annual charge, will be worth £48,541 – more than double.”

So clearly where you invest is important, and moving your pensions into a consolidated pot with better returns could make a big difference.

However, there are sometimes charges known as exit penalties to remove your pension from the current scheme.

This means that those who will retire soon might not benefit from removing their money around at a later stage.

PensionBee told Express.co.uk: “The logistics of actually transferring your pension are really pretty simple, and some providers will even do the legwork for you – PensionBee for one.

“Alternatively, you can tackle the task yourself by telling your current provider that you want to switch, but do bear in mind that you’ll need to check if your existing pension scheme allows you to transfer some or all of your pension pot and of the scheme that you’re transferring into will accept the transfer.

“You can transfer your UK pension pot into another registered UK pension scheme, or an overseas option if you’re moving abroad.

“There are certain restrictions around this though, and the Gov.uk website can tell you more.”

How do you get your state pension?

The government states Britons must claim their basic state pension, and there are two way you can do it if you are based in the UK.

You can do it over the phone or by downloading the state pension claim form and sending it to your local pension centre.

Those eligible for the new state pension should get a letter two months before they reach state pension age.