Should I consolidate my old pension pots in 2026?

Full answer

Pension consolidation means transferring two or more pension pots into a single pension — usually a personal pension or self-invested personal pension (SIPP). It can be a good move but carries risks that require careful assessment. **Potential benefits** - Lower overall charges: old workplace pensions can carry annual management charges of 1–1.5%; modern platforms often charge 0.15–0.45% - Simpler management: one pot is easier to track and adjust - Better investment choice: newer schemes often offer broader fund ranges - Estate planning: consolidating into a SIPP can improve the ability to pass benefits to dependants (death before 75: tax-free; death after 75: taxed at recipient's marginal rate) **Risks and what to check before transferring** 1. **Safeguarded benefits**: defined benefit (final salary) pensions and pensions with guaranteed annuity rates (GARs) can be extremely valuable. A GAR of 9–12% (common in 1970s–1990s policies) is worth far more than current annuity rates. You must take regulated financial advice if transferring a DB pot worth more than £30,000 (the advice requirement). 2. **Loss of employer contributions**: if you transfer away from an active workplace pension, you may lose ongoing employer contributions. Never leave an active workplace pension. 3. **Pension Annual Allowance (AA)**: transferring a pension does not trigger the Money Purchase Annual Allowance (MPAA) — a simple transfer is not a "benefit crystallisation event." 4. **Insurance benefits**: group life cover or income protection attached to an old workplace scheme may lapse on transfer. **How to trace old pensions** Use the government's Pension Tracing Service (0800 731 0193 or gov.uk) to locate old workplace pensions if you have lost track of providers.