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Pension consolidation is when you combine 2 or more pensions into one pot. It’s also known as ‘transferring’ or ‘merging’ your pensions as you move your money out of one scheme and into another.
There are several good reasons why you might consider merging some or all of your pensions into one pot:
If your pension savings are in one place, you’ll be able to see if you're on track to meet your goals.
It can also be motivating to see your money grow – it may even tempt you to add more in.
Most of us dread wading through lots of financial paperwork, and pensions often come top of the list of things we put off.
Bringing your pensions together might create some extra admin in the short term, but it could be worth it to know all your savings are in one place.
Plus, you’ll get fewer statements each year.
When you retire, rather than receiving several smaller payments each month, a combined pension means you get one larger payment – so it’s easier to budget.
A single pension pot could mean you’ll pay less in charges.
It’s worth checking the charges of your various pensions. This is because having several smaller pension pots may be more expensive than consolidating them in one place.
If you have several pots, chances are one is performing better than the others – although past performance is no guarantee it will do as well in the future.
It’s important to understand both the performance and the charges on each pot to see which is working harder for you.
Your pensions may be invested in funds that aren’t suitable for you as many schemes offer a limited range of investments.
By combining them, you could have more choice in where your pension is invested. You can also make sure you’re happy with how much risk is being taken.
Newer pensions can be more flexible when accessing your money in retirement.
Changes to pension legislation in recent years have given people more freedom to control their pensions when they retire.
Check the details of your scheme to find out whether this applies to your pension.
To explore your options, start by making a list of the pensions you’ve got.
Pension providers will usually send you a statement each year. However, if you’ve moved several times, you may have lost track of a pension or two. If you need help to locate your old pensions, try the Pension Tracing Service.
Once you’ve listed all your pensions, contact each provider and ask them for details of your scheme – and keep all your paperwork together.
Before you transfer your pensions into a single pot, you need to be sure it’s the right thing to do. Some pensions may charge you for transferring out, while other types of schemes offer benefits you might want to keep.
Take a close look at each of your pensions and ask yourself the following:
Some employers offer a defined benefit scheme that will provide a pension in retirement based on your final salary or an average of your earnings during your career. It could make sense to stay in a defined benefit scheme because it offers a guaranteed income for life, which may rise with the cost of living. It could also offer a pension for your spouse or partner when you die.
If your pension is a defined contribution or money purchase scheme, this might not provide a guaranteed income for life so it may be worth transferring.
Explore: A guide to understanding pensions
Safeguarded pension benefits include some form of guarantee or promise such as an annuity rate – the rate at which you convert your pension savings into a guaranteed annual income.
Annuity rates fluctuate in line with the bank base rate, but even when rates increase they may still be lower than the rate that may be guaranteed by your pension scheme. So, if you’ve been promised a good rate within your scheme, it could be worth holding onto if you want the security of a higher guaranteed income for life.
These might kick in if you move your pension pot to another scheme. If they’re high, moving your money could be a false economy.
Most schemes charge an annual percentage of your pot to manage your pension. But some also charge a monetary fee, such as £100 each year, on top of the percentage charge.
Make sure you know what charges apply to your pensions, as high fees can eat away at smaller pots.
If you’re sure that consolidating is right for you, follow these steps:
Make sure your pensions don’t have any benefits you could lose if you merge them together. Also make sure you consider all charges and any fees involved with combining your pensions.
You only have one retirement so you don’t want to make a costly mistake with your pensions that you could one day regret. Before you start combining your pensions, it’s worth talking to someone who specialises in consolidation advice.
If you feel you'd benefit from financial advice, we can help. You'll need to have £100,000 in investments and savings to qualify. Fees and other eligibility criteria apply.
If you’re looking for free guidance, you’ll find lots of helpful information on the MoneyHelper website. And if you’re 50 or over, you can also book a phone appointment to discuss your options.
Pension savings are big targets for fraudsters. If someone contacts you unexpectedly offering to help you transfer your pot, it’s likely to be a pension scam.
Always check a firm’s credentials before speaking to them. If you’re concerned, contact the Financial Conduct Authority (FCA) to check they’re legitimate. To find out more about pension scams and how to avoid them, see the FCA website.
Explore: Latest scam warnings
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This article was last updated: 26/03/2026, 10:56
