The Pensions Policy Institute puts the value of lost or forgotten pension pots in the UK at £31.1 billion, spread across 3.3 million pots averaging £9,470 each. Separately, a Wealth at Work survey published in July 2026 found 62% of UK workers now hold more than one pension pot, with 5% not entirely sure how many they have. Combining them into one place sounds like an obvious tidy-up. Sometimes it is. Sometimes it means giving away something considerably more valuable than the convenience gained.
What combining pensions genuinely does for you
One pension is simpler to track than four or five – you can see your total retirement savings at a glance, rather than logging into several providers to piece the picture together. Older pensions, particularly ones opened decades ago, sometimes carry charges well above 1% of the fund value each year, and moving away from a legacy scheme into a modern low-cost pension can make a real difference over time. It also tends to make retirement itself more straightforward: reviewing your investment risk as you approach it, and later managing withdrawals and beneficiary nominations, is considerably easier from one pension than several.
Final salary pensions are a different question entirely
If any of your pensions is a defined benefit, or final salary, scheme, the usual consolidation logic doesn’t apply. Transferring a DB pension worth more than £30,000 requires regulated financial advice by law, and the Financial Conduct Authority’s long-standing position is that for most people, transferring out of a DB scheme isn’t in their best interests. You’d be giving up a guaranteed income for life, index-linked in most cases, in exchange for a transfer value invested in the market – a trade that occasionally makes sense for the right individual circumstances, but rarely as a byproduct of “tidying up” alongside other pensions.
Some older pensions carry guarantees a new one won’t
It isn’t only defined benefit schemes worth checking carefully. Some personal pensions taken out before the early 2000s include guaranteed annuity rates, often set at levels well above what the market offers today – transfer the fund elsewhere, and that rate typically disappears with it. A smaller number of pre-2006 schemes carry protected tax-free cash entitlements above the standard 25%, which are usually lost on an ordinary transfer too. And if your scheme rules allowed you to draw benefits before age 55, that protected pension age generally doesn’t carry over to a new provider unless the transfer is structured very specifically to preserve it. None of these show up by glancing at a pension statement – they’re the kind of thing that only becomes obvious once someone has actually gone looking.
Watch for exit charges on older with-profits funds
Some older, particularly with-profits, pensions can apply a market value reduction if you transfer or cash them in before their stated maturity date – effectively an exit penalty that reduces what you actually receive. Exit charges on other older pensions are capped, at 10% for those taken out before March 2017 and 1% for anyone 55 or over transferring a more recent scheme, but it’s still money that would otherwise stay invested for you, and worth checking before assuming a transfer is straightforwardly cost-free.
Where consolidation reliably makes sense
Plenty of pensions are perfectly safe to combine. Smaller, modern workplace pensions from jobs you’ve since left, with no guarantees attached and no employer still contributing, are usually straightforward to bring together, and doing so is often where most of the benefit sits – less admin, one coherent investment strategy, one place to check when retirement starts coming into view. The distinction that actually matters isn’t old versus new, it’s whether a pension has a guarantee or protection attached that a modern scheme can’t replicate.
A word on how consolidation gets sold
The FCA has flagged that some people transfer pensions on the strength of a short-term incentive, such as a cashback offer from a consolidation service, rather than a proper comparison of what they’re giving up. Contingent charging – where an adviser is only paid if a transfer goes ahead – was banned for defined benefit transfer advice back in 2020 specifically to remove that pressure, which is worth knowing if you’re ever advised to transfer and aren’t sure whether the advice is independent of the outcome.
Let’s look at what you’re actually holding
We work with clients across Poole, Bournemouth and the wider Dorset area to go through exactly this – checking each pension for guarantees or protections before recommending anything, rather than assuming consolidation is automatically the right move. If you’ve got old pensions you haven’t looked at in years, get in touch and we’re happy to have a no-obligation conversation about what’s actually worth combining.
This article is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only. All information is correct at the time of writing (September 2026) and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The value of any guarantees or protected benefits referred to in this article depends on your own scheme rules and individual circumstances, and should be checked before any transfer decision is made.
The Financial Conduct Authority does not regulate cashflow modelling or tax planning.