Are you building up a series of pensions pots as you move jobs?

More than a third of professionals are expected to have at least 10 jobs in their lifetime. Since the introduction of mandatory auto-enrolment into workplace pension schemes, many will find themselves building up a substantial collection of pension pots that are easily forgotten about.

The Department for Work and Pensions (DWP) estimates that there is around £400m sitting in lost pensions, which could be languishing in poorly-performing investment funds.

Last week the Government confirmed that plans for a pensions dashboard, which will allow you to see all of your retirement savings in one place, will go ahead, following reports the scheme would be scrapped. This should help savers keep track of their various pension pots.

Until the dashboard is launched, how can workers best manage their multiple pension pots?

Each pension could be left in place within the individual employers’ schemes, but that is not always advisable. It makes it incredibly difficult to keep track of how much has been saved for retirement and how it is all invested. Pots are liable to be forgotten and neglected, especially with changes of addresses and contact details over the years.

There are two main strategies to solve this problem. No matter which you choose, you should take full advantage of whatever scheme your current employer offers.

At a minimum, make sure to contribute enough to maximise your employer’s contribution.

If you don’t want the hassle of managing your pension yourself, moving it with you as you move employers is the most straightforward option. This avoids the risk of losing track of multiple pots and means all of your pension savings will be invested in the same way.

Before you switch jobs, speak to your company’s pension department or pension provider, and ask what you need to do to transfer it into your new company’s scheme.

There will be a transfer out form and you will likely be required to show identification. Be warned: it may take weeks or even months to complete.

However, there is one significant drawback with this strategy. Typically, five years is considered the minimum time-frame any investment strategy needs to be given.

According to research by pensions advice firm Portafina, more than half of millennials frequently spend less than a year in each job. The average person works 11 different jobs in their lifetime, according to the DWP.

If you are moving jobs every one or two years, and moving your pension with you, that means you will be divesting and reinvesting far more frequently than is advisable.

One way to handle this is to keep a record of all your pension pots, and only amalgamate those that have reached a certain age.

Move your pensions into a Sipp

Another option is to move your pensions into a self-invested personal pension (Sipp) as you leave each company.

When you transfer into a Sipp, your pension money will likely be moved across as cash. It will then be up to you to decide how to invest it.

There are a number of options, ranging from buying a simple all-in-one portfolio if you would prefer a hands off approach, to picking your own funds and stocks.

If you don’t want to manage your money yourself, you could use a financial adviser who can either provide direction, or take control of the investment entirely.

Should you choose to take this route, you should speak to an adviser at the earliest possible opportunity before you begin amalgamating accounts.

Whether or not it is cost effective will depend, amongst a number of considerations, on the adviser’s charges and how much you have to invest.



Tracing your pension

If you think you may have money saved in misplaced pension pots, you can find it using the Government’s free online pension tracing service.

You will need the name of the pension provider or the employer to get started. If you are unsure, it is a good idea to go through some of your old documents, ask former colleagues or try the Companies House website, which holds the names of all closed and existing companies registered in the country.

Once you are able to get in touch with the provider, you will be able to see how the pot has been performing and can decide to move it to your existing workplace scheme, your Sipp, or to leave it in place.

At Richmond House Wealth management we help our clients get the best cash rates and provide suitable solutions to help you achieve the best returns.

Usually the initial meeting or conversation with a financial adviser will be to establish what your needs are and this is usually free. Richmond House Wealth Management has specialist knowledge and are always available to answer your questions.

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned about the content hereof and any such action or inaction. Professional advice is necessary for every case.


John Merrifield.

Dip PFS, Cert (CII) MP.