There are adverts all over the TV and social media about pension consolidation and they make good points about making sure that your pension money is easily manageable, you know where it is and that you are modernising some of the old investments.
So, what if I tell you that the Financial Conduct Authority (FCA) do not consider pension consolidation as a valid reason to transfer your old pension plans and would throw out a case from a financial adviser, on that basis alone?
The Options
Many of the companies that encourage pension consolidation onto their platforms, do not have to give financial advice and so can overlook this FCA requirement for justification. They simply rely on the fact that you want to do it and have done the research yourself and then simply give you the ability to do so.
Your current pension providers might offer the ability to transfer other pensions into them anyway and some old schemes have fantastic offerings and benefits, so why do you need a new pension to do the consolidation anyway? It’s super important to always look at what you are giving up before you jump into things.
Are you an investment expert? I suspect not and so do they. If they are saying sensible things like ‘manage risk’, ‘future growth’ and ‘expert investment team’, it is more than likely that it is going to sound like a good idea to do. So how do you know that what you are moving to is better than what you had?
Expertise
It’s pretty simple really. You should be able to look into your existing pensions with a keen knowledge on pension benefits and investment expertise, to evaluate whether there is indeed an opportunity elsewhere. You should then evaluate the options elsewhere, with equal rigour, and find the best opportunity, not just something that looks ‘fairly okay’.
If you are not doing this then there is absolutely the possibility that you are in fact making yourself worse off by moving your pensions. Most people do this because they simply don’t know what they don’t know and assume that consolidation is a good enough idea on its own.
So who does know? You guessed it, our independent financial advisory team. They provide you with the financial advice you need and help you make that decision, with the knowledge it requires.
For more information and a totally free initial consultation, contact us and believe us when we say, you will be glad you did.
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Fusion Financial Ltd is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales, Company Registration No: 11600565. Registered Office: Marlborough House, 298 Regents Park Road, Finchley, London, N3 2SZ.
