How to consolidate your pensions

Writer, Charlene Young
19 minute read

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Have you ever considered combining your pensions? Having pensions scattered around can make it hard to get a full picture of your retirement savings. Putting your pensions in one place can help.

This page walks you through how to consolidate pensions, and the ways it could make managing your investments easier.

Lisa Webster, Senior Technical Consultant at AJ Bell, discusses the benefits of consolidating your pension, and what you need to consider when transferring a pension.

View video transcript

[00:00 - What is pension consolidation?]

If you’ve moved job a few times, you’ll probably have built up pensions in a few places. Consolidating your pensions in one place – such as in a Self-invested personal pension (SIPP) – can make it a lot easier to see what pension savings you have. It can also mean a whole lot less paperwork.

[00:25 - Should I consolidate my pensions?]

There could be good reasons to consolidate into a SIPP, such as reduced costs, greater investment choice and more flexibility in how you can take your pension. It can also give you more choice about who you can leave funds to on your death.

[00:45 - Pension consolidation and transfers checklist]

But before transferring pensions to SIPP, there are a few important things you need to think about.

First of all, will your existing pension scheme charge you an exit penalty or make a market-value adjustment to your fund? This could mean you lose money if you transfer it.

Second, if you transfer your pension to SIPP, will you lose any valuable benefits or features? Do you have a guaranteed annuity rate, for example, or the ability to take more than 25% of your fund tax-free? These benefits are usually lost when you transfer, so you need to be careful.

Third, does your employer contribute to your current pension scheme and if so, are they willing to pay into a SIPP, or would you lose these valuable contributions?

[01:25 - Defined benefit pension schemes]

Generally, you're probably better off not transferring to a SIPP if you're a member of a defined benefit or final salary scheme where your income in retirement is guaranteed for the rest of your life, and possibly for the life of your spouse after you die. If you do want to find out if transferring from such a scheme is worthwhile, you'll have to take advice from a suitably qualified financial adviser if your transfer value is more than £30,000. Otherwise, the scheme trustees won't allow you to transfer out. You can't transfer out of most public sector schemes, such as the NHS, teachers or civil service pension schemes.

[02:00 - Pension consolidation options]

If you transfer your pensions into a SIPP, you’ll be responsible for your own investment decisions, so you need to be comfortable doing this. If you know the investments you want to make, you should check whether you can access them via your existing pension, as you may not need to transfer.
If you sell your investments to transfer cash, you will be out of the market, and you could lose out if values go up. To avoid this problem, it’s possible to transfer assets from your old pension into your SIPP without selling them.
Finally, whatever type of scheme you have, you should compare the costs of your existing pension to the costs of the SIPP.

You can find other important things to know and consider before consolidating your pension on the AJ Bell website. You can consolidate your pension with AJ Bell and use our pension finding service to find your lost pensions.

Lisa Webster, Senior Technical Consultant at AJ Bell, discusses the benefits of consolidating your pension, and what you need to consider when transferring a pension.

View video transcript

[00:00 - What is pension consolidation]

If you’ve moved job a few times, you’ll probably have built up pensions in a few places. Consolidating your pensions in one place – such as in a self-invested personal pension, or SIPP – can make it a lot easier to see what pension savings you have. It can also mean a whole lot less paperwork.

[00:25 - Should I consolidate my pensions]

There could be good reasons to consolidate into a SIPP, such as reduced costs, greater investment choice and more flexibility in how you can take your pension. It can also give you more choice about who you can leave funds to on your death.

[00:45 - Pension consolidation and transfers checklist]

But before transferring pensions to SIPP, there are a few important things you need to think about.

First of all, will your existing pension scheme charge you an exit penalty or make a market-value adjustment to your fund? This could mean you lose money if you transfer it.

Second, if you transfer your pension to SIPP, will you lose any valuable benefits or features? Do you have a guaranteed annuity rate, for example, or the ability to take more than 25% of your fund tax free? These benefits are usually lost when you transfer, so you need to be careful.

[01:25 - Defined benefit pension schemes]

Third, does your employer contribute to your current pension scheme and if so, are they willing to pay into a SIPP, or would you lose these valuable contributions?

Generally, you're probably better off not transferring to a SIPP if you're a member of a defined benefit or final salary scheme where your income in retirement is guaranteed for the rest of your life, and possibly for the life of your spouse after you die. If you do want to find out if transferring from such a scheme is worthwhile, you'll have to take advice from a suitably qualified financial adviser if your transfer value is more than £30,000. Otherwise, the scheme trustees won't allow you to transfer out. You can't transfer out of most public sector schemes, such as the NHS, teachers or civil service pension schemes.

[02:00 - Pension consolidation options]

If you transfer your pensions into a SIPP, you’ll be responsible for your own investment decisions, so you need to be comfortable doing this. If you know the investments you want to make, you should check whether you can access them via your existing pension, as you may not need to transfer.
If you sell your investments to transfer cash, you will be out of the market, and you could lose out if values go up. To avoid this problem, it’s possible to transfer assets from your old pension into your SIPP without selling them.
Finally, whatever type of scheme you have, you should compare the costs of your existing pension to the costs of the SIPP.

You can find other important things to know and consider before consolidating your pension on the AJ Bell website. You can consolidate your pension with AJ Bell and use our Pension finder service to find your lost pensions.

What is pension consolidation?

Consolidating or combining pensions is when you move the pension pots you’ve built up over your working life to one place. Though there are lots of advantages to doing this, there are disadvantages too.

Is it worth combining your pensions?

Some of the advantages of transferring pensions into one pot, like a Self-invested personal pension (SIPP) or Ready-made pension, include:

Less admin and paperwork

One pension account means fewer statements and paperwork to deal with, and only one online log in.

Potentially lower charges

If you combine your pensions into a plan that offers better value, you can end up paying far less in charges over time – meaning you’ll keep more of any investment returns.

Investment choice to suit you

A SIPP usually has a far greater investment choice than other types of pension, of you’d like to choose and manage your own pension investments yourself. With a Ready-made pension, you can choose from four AJ Bell growth funds, managed by our in-house experts.

Easier management

Your retirement savings will all be in one place, making it easier to check your pension and investment strategy is on track. With a Ready-made pension, any money paid in (including eligible pensions you find) will be automatically invested for you, into your chosen AJ Bell fund.

More options at retirement

A SIPP offers greater choice about how you can access your pot at retirement than other pension types. But keep in mind that our Ready-made pension is designed for people building up their savings, not those at or near to retirement.

When should I combine my pensions?

You can consolidate pension pots whenever you like. But there are times when it may make more sense – such as if you’ve changed jobs, or if you’re thinking about the timing of your retirement plans or what you’ll want from your pensions in the future.

Before you start combining pensions, you should check that your existing pensions don’t have any valuable guarantees or benefits you’d lose if you moved them.

Read on to find our pension consolidation checklist, which tells you what you need to ask before getting started.

Episode 12: Transferring and consolidating pensions

Our experts discuss the benefits of combining your old and lost pensions into one single pot – easier management, less administration and paperwork, and smaller charges.

Listen to our Investing Essentials podcast

How do I consolidate my pensions?

Before you can consolidate your pensions, you usually need to make sure you have all your policy documents and details to make a transfer. So, the first thing to consider is whether you know where all your pensions pots are.

Combining pensions when you have all your old pension details

If you have all your old pension details, you can get started straight away.

Opening a SIPP or Ready-made pension with us only takes around 10 mins. During your application, you'll be asked for details of the pensions you would like to transfer. Once we have those details, we'll contact your current pension provider(s) to get the transfer started.

Open a SIPP Open a Ready-made pension

Combining lost pensions

Given that the average person changes jobs 11 times, that's a lot of different pensions to keep track of. If you're not sure where all your old pensions are, you're not alone. According to the Institute for Fiscal Studies in 2025, as much as £30 billion is sleeping in lost or forgotten UK pensions.

It's why more and more people are trying to find their lost pension. And it’s why we've launched a service that does all that for you, for free: the AJ Bell Pension finder.

To get access to the service, you need to open an AJ Bell account.

Find your pensions

If you'd prefer to find your pension details yourself, the government’s free Pension Tracing Service may be able to help. Visit the website or call 0345 6002 537 for more information.

Pension consolidation checklist

Before you move a pension, it's important to make sure you won't lose money, or any valuable benefits by doing so.

Here’s what you should check with your current provider:

Will you be charged an exit penalty or face a market-value adjustment (MVA)?
Will you lose any valuable benefits? Examples include a guaranteed annuity rate, the right to take more than 25% of your fund tax free, or a pension paid to your spouse when you die.
Does your employer pay into your existing pension, and if so, will they pay into a SIPP? A Ready-made pension doesn’t accept employer payments.
Do you have a defined benefit (also known as ‘final salary’) pension, which guarantees a lifelong retirement income? If so, you’re probably better off not moving. If the transfer value is £30,000 or more, you’ll need to get financial advice. To transfer a defined benefit pension to AJ Bell, both you and your adviser need to complete a declaration form.

Should I sell my pension investments before combining pensions?

Remember that if you do decide to combine all of your pensions, how you transfer them is important. Selling your investments first to transfer as cash means you’ll be out of the market, and could lose out on potential gains. You can transfer investments to an AJ Bell SIPP directly, without selling them first, as long as your current investments are available on our platform. With a Ready-made pension the assets will be sold so that they can be invested in your chosen AJ Bell fund.

If you’re still unsure on what to do with multiple pensions, you should seek professional financial advice. Alternatively, you could look at the resources offered by the free government-backed service, MoneyHelper.

Important information: These articles are for information purposes only and are not a personal recommendation or advice. Pension rules apply, and may change in the future. By making the Ready-made pension and AJ Bell funds available to you, we’re not making a personal recommendation. Before you transfer a pension, check with your current provider that you won't lose any money or valuable benefits.

Self-invested personal pension

An AJ Bell SIPP gives you complete flexibility on how much you save for retirement, and when and where your pot is invested.

Open a SIPP

Ready-made pension

The AJ Bell Ready-made pension is a low-cost, hassle-free solution, designed to simplify how you build, manage and grow your pension pot.

Open an account

Written by:
Charlene Young

Pensions and Savings Expert

Charlene Young is AJ Bell’s Pensions and Savings Expert. She joined AJ Bell in 2014 from a wealth management firm where she worked with private clients and small businesses as a financial planner.