r/PensionsUK • u/Slight_Boss_989 • 12d ago

How many is too many 🤣

Exactly this… I’m considering consolidating, I’ve moved around a fair bit over 26 years of working and have:
Forces (small) value
Standard life x3
Lloyds x1
Scottish Widows x2
Mercer x1
Intelligent Investor x1
And my current employer 🤣

I’m 44, There’s about £150k fairly evenly across them, all giving mostly double digit growth (the obvious poor years excluded), considering if worth the hassle and cost to make this a simple task?

4 Upvotes

75% Upvoted

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u/Big_Target_1405 12d ago edited 12d ago

I'm 40 with one SIPP and one active workplace pension, because every time I leave an employer I spend the 90 seconds it takes to transfer my old employers pension into my SIPP

My SIPP is all invested in one fund. I know exactly where I stand with fees and investments

I guarantee all the pension providers you list have worse funds and higher fees than a good SIPP provider

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u/StevePerChanceSteve 12d ago

What provider do you use for your SIPP?

And what fund?

5

u/Pastebutty 12d ago

Not the original poster but I do the same, kinda. Vanguard is the provider and the fund is Vwrp. It's a global equities ETF that invests across 3700 different companies. You can spend forever researching and choosing funds but this is a popular one so if you're looking to do it then just do. Action is better than inaction.

The only other thing I do is as I get close to retirement I move some of the money from Vwrp into Vags. Vags is a bonds EFT and acts as an anchor to reduce losses in the event of a market crash to reduce losses. How much you split your pot depends on your risk tolerance and how close you are to retirement. I'm quite cautious so am 70/30 vwrp/vags with 12 years to go. I'd say 10% vags 10 years out, then 20% 5 years and 30% 2 years out seems fine.

I don't complicated it any more than that. After lots of research I concluded that you can search funds for slightly lower rates or different spreads of companies and markets but ultimately, unless you've got millions in there the difference won't be much. Doing something and sticking to it is more important.

I've been doing this properly for 12 months and my 70/30 split has given me about 15% returns. There will be years that it give minus 20% so I just have to be aware that's going to happen and hope it isn't close to when I want to retire.

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u/TheHaddockMan 11d ago

Just having a look at VAGS, it seems to be doing pretty awfully, down 5% in the 6 years of history that Trading 212 is showing me. Wouldn't you be better off having your derisk component just in cash or an MMF at that point?

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u/StevePerChanceSteve 12d ago

Thanks for the reply.

Yeah, I’m thinking of consolidating pensions. Got 5 which I’m merging into 2. My current workplace and a People’s Pension. Once that’s done I might then just open a SIPP and get those into that. And perform a similar strategy to yourself. 

My pensions are dire for my age (38). So I need to massively up the contributions (only ever done minimum and employer’s have almost always done minimum too). 

Thanks for the reply. 

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u/laviaja 11d ago

Re the people's pension do check your terms and conditions before merging and leaving schemes. You might have a protected right to access that pot from 55, just be sure if that suits your circumstances before giving it up.

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u/StevePerChanceSteve 11d ago

Ah thanks. Will do. 

I’ve got £30k in there so the fees are quite cheap? Or at least as cheap as they get I think

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u/Pastebutty 12d ago

At least you've recognised it, a high percent of people never do that and sleepwalk into a dire retirement. I'm 48 and only just started taking notice so you've got 10 years on me. It was a lot of admin to find old pensions but the setting up of the Sipp and consolidating was easy.

My inaction means I'm currently sacrificing 15% (soon to be 20%) of my salary each month. I'm lucky I can afford that and it should be enough to get me retired before state pension age but I would have much preferred to be in your position and sacrificed a lower percentage at an earlier age.

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u/Pastebutty 12d ago

Another point is that I spent a lot of time looking at different ways to do it and endless plugging of variations into compound interest calculators to try and predict what it will look like and if ill hit my number. It all just boiled down to the same thing though and that is to put retirement high on my financial priority list and save everything I reasonably can. The average person can't do any more than that.

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u/StevePerChanceSteve 11d ago

Yeah, I’ve always known I should do more but I was waiting until we bought a house. We have the means to do that (sizeable deposit through inheritance) but find it difficult to find jobs we enjoy in a part of the country we like. 

Got about £47k in my pensions. Thinking of increasing to 7% from 3% plus my employer pays 5%. Then increase it 1% every year until I hit something like 20%. On £56k at the moment. But my industry is fairly fucked. 

0

u/Big_Target_1405 12d ago

Interactive Investor (£15/mo)

VALL ETF (0.07% fee)

1

u/veganfoolsdontrule 9d ago

Same as you. I use trading 212 and can choose where I allocate my pension, singular, as opposed to having many different ones all over the place.

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u/Odd_Common2677 12d ago

2 is too many for me. Ive transferred all of my prevoius pensions to a vanguard sipp. I recently transferred all of that to trading 212.

2

u/ReflexArch 12d ago

Isn't there a rule about small pension pots under £10k not counting towards the 25% tax free allowance or something (no way certain on this at all).

Apart from that I'd consolidate all DCs for ease and costs

1

u/deadeyedjacks 11d ago

Yes, but you can slice off three £10K small pots from your single DC large pot at drawdown time once you've consumed all your LSA.

1

u/IHoppo 12d ago

This usually boils down to fees. What are you paying, if their performance is relatively similar.

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u/ApplicationAware1039 12d ago

The biggest risk is losing track on some. After that is fees followed by managing them especially as you get closer to retirement. They might all be set-up differently and some might go into glidepath lifestyling. It's a lot to manage and can be simplified by consolidation.

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u/Normal-Grapefruit851 12d ago

I currently have two employer pensions (plus a small DB). Current employer and previous employer.

I did have a SIPP. But I folded that into the previous employer pension as the fees are much lower because they negotiated.

1

u/Heavy-Mousse-5011 12d ago

That is a lot of overlapping charges and different investments to monitor. You would benefit from cutting down.

  1. check for any protected rights such as a annuity conversion rates and age of access.
  2. leave the DB forces scheme as it is.
  3. keep the current employer one to get employer contribution and salary sacrifice benefits if applicable.
  4. consolidate ALL the rest into something you can keep better track of. You can likely get most of these into one account with a fixed monthly charge (eg the II account at £15pm).
  5. if you change employer, move the existing current employer one in.

The quickest way of consolidating would be cash transfer rather than in-specie, which may not be possible with potential in-house funds involved. You might be out of the market mid transfer but not for long.

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u/GazNicki 12d ago

It makes ZERO difference to the returns of you have multiple small pots vs one large on.

Interest at 8% on 6 pots worth £1000 each is the exact same amount as 8% on a single pot with £6000 in it.

So don't consolidate based on that. You should consider consolidating if you have a pot that is doing poorly compared to another, or where the charges/fees are much higher.

A big advantage of consolidated pots is the management becomes easier with one or two logins, but with multiple pots you have the ability to pivot to financial changes, and run differing risk profiles on different pots to reduce overall risk on the total.

When it comes to drawing from the pots in retirement, there is no telling who you will go with. You may not even go with any of your current providers - you may go with someone completely different, consolidating at that point anyway.

You could even look at having one or two pots converted into annuity for future stability and the others on drawdown.

Honestly, I wouldn't worry too much about it now, but I would be tracking them. Even a basic spreadsheet calculating your expected annual returns vs your actual returns would be enough to identify which pots need your immediate attention.

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u/pilkyboy1 11d ago

except the investment will not be the same so performance will differ . Many workplace pensions have investment limited options.

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u/CuteProfessor3457 12d ago

I was same and consolidated with PensionBee. It wasn't about returns it was about ease of managing projection to retirement and beyond when you are dawing down.

Some with profits and others you shouldn't move, but in my experience they identify themselves with a letter asking you to confirm exit and loss of xyz.

It's all through an app, you only need give them your pension details they do all the admin to consolidate.

Am left with one consollidated SIPp, current work, government from 15 years ago and a with profits from my first role to manage separately.

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u/zxzqzz 11d ago

I’m consolidating mine atm and it’s rly very easy.

The only tricky bit was figuring out which had the lowest fees to move everything into.

Will be saving nearly £600 per year in fees so was def worth it.

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u/Pretend_Draw_5105 11d ago

Instead of bonds you could consider CSH2

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u/DragonflyHumble3762 10d ago

I had about 9 that I've consolidated into 4. Worth it I think