Consolidating your pensions isn’t a black-and-white decision – that’s why Moneycube provides financial advice on it! However, there are many solid reasons why combining pensions from jobs you have left is worthwhile. We’ve outlined them below:
- Keeping track of your pensions becomes easier – On the simplest level, you certainly don’t want to lose touch with an old pension altogether. But more than that, it’s important to understand what your pensions are invested in, and how and when you might access them. By consolidating your pensions, this is all visible on a single online dashboard, with daily updated values.
- You can drive down the cost – Of course, this will depend on the cost of your old pension or pensions. But there’s a good chance you can reduce the annual cost, and even obtain a one-off uplift in the value of your pension when you transfer it.
- Access to ongoing advice – One of the problems with stranded pensions from old jobs is it is difficult to obtain financial advice on them. It’s not uncommon to find old pensions invested in assets that are completely unsuitable. That might mean your pension is sitting in cash for years on end, its value being eroded by inflation. Or it could mean that you’re invested in highly volatile assets even though you intend to draw down the pension in a matter of months.
When you combine your pensions using Moneycube, you become an ongoing customer of ours, and we work with you over the years to make sure your money is invested appropriately for your requirements.
- More investment choice – Many workplace pensions come with very limited investment choice. By transferring your pension out of your old company scheme, you can gain access to a huge range of assets.
Investment choices when you combine your pensions can be as simple or as sophisticated as you required.
You might choose a self-invested pension, putting your money in assets from company shares and bonds to commodities and property. Or you could choose a simple, index-based approach which gives you broad exposure to the world economy in a simple way, and keeps costs in check.
- Control over timing – One of the great advantages of transferring your old pensions is that you control when you access it. Typically your old job will decide when you can draw down your pension. But if you consolidate your pension with a new provider, you decide. That might mean taking a lump sum as early as the age of 50. Or it might mean leaving it untouched in its tax-free wrapper until age 75. Either way, you, rather than your old employer, are in charge.
As you can see, there are lots of reasons why combining your pensions is the right option for many pension savers in Ireland. But it’s not always the path to follow. For example, if you have a defined benefit pension, or face early exit penalties, then pension consolidation needs careful consideration. At Moneycube, we can analyse your old pensions, and advise you on the way forward.
Read on: Using index funds to consolidate your pensions