However, this still may not compensate for the benefits you are giving up, and you may need an exceptionally high rate of investment return on the funds you are given to match what you would get if you stayed in the final-salary scheme.

Alternatively, you may have a money purchase occupational scheme or a personal pension. These pensions rely on contributions and investment growth to build up a fund. When you retire, this money can be used to buy an annuity which pays an income.

If appropriate to your particular situation, it may make sense to bring these pensions under one roof to benefit from lower charges, and aim to improve fund performance and make fund monitoring easier.

Transferring your pension

Pension transfers are a complicated area of financial planning and there are many things to consider before proceeding with a transfer. Here are some of the most common questions we are asked by our clients considering this course of action.

Q: Will the new pension be more expensive than my existing one(s)?
A: If the new pension costs more, you must make sure you are satisfied that any additional costs are for good reason. For example, if the new pension is offering you access to more funds than your current pension(s), consider whether you need them. You will receive information about the costs of the new pension in the Key Features Illustration (KFI) that is provided to you. The Key Features Illustration refers to the actual funds and investments that you will be using in your new pension.

Q: Is it a good idea to transfer all of my pensions into a single new pension?
A: If you currently have several pensions and are looking to put them into one new pension, you need to fully understand the associated costs. You may not necessarily need a new pension to put all of your pensions together. If one of your existing pensions already meets your needs and objectives it might be possible to transfer all of your other existing pensions into that one.