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Like many professionals, the new 'standard' length of stay at any one company is around 2-3 years.

I myself have moved a few times at the start of my career from one company to another, beginning new company workplace pension pots.

I've since remained at my current post happily for a number of years now, built up a good pension with my current workplace, however I've left a trail of small pension pots at the previous job roles.

Would it be beneficial to keep these smaller pots with their respected schemes, or should I decide to track these down and attempt to 'refund' them?

I question this because, I know that after only 2-3 years of accumulation, the pots will be negligible, however this capital could be used better elsewhere if I was to withdraw them.

I understand this might be quite general question but, I have a small doubt that in 40 years time, I'd remember to claw back these small pots once I do hit my retirement.

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    Are any of the pots "defined benefit" i.e. based on years you worked there / salary you were paid? Or are they "defined contribution" i.e. you/the employer each paid in a certain % of your salary? You mention "accumulation" so I would suppose the latter, but this is important info on which to base the answer. – marktristan Apr 27 '16 at 10:06
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    Also could you clarify what you mean by 'refund' them / 'withdraw' them? Do you mean to consolidate them all in one pension that you continue to invest for your retirement, or do you mean to get the funds out as cash? – marktristan Apr 27 '16 at 10:08
  • @marktristan Morning marktristan! Indeed the latter for the first comment; as this is probably the most common form of pension for most salary jobs [at graduate level too I must add!]. – MackieeE Apr 28 '16 at 8:32
  • @MackieeE "I have a small doubt that in 40 years time, I'd remember to claw back these small pots once I do hit my retirement." What about having a list in the respective folder where you store everything related to your retirement and stuff? There you'll find it. – glglgl yesterday
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the pots will be negligible, however this capital could be used better elsewhere if I was to withdraw them.

You won't be able to withdraw the money. Notwithstanding the recent 'pension freedom' changes, money put into a pension is still inaccessible until age 55 at the very earliest, and probably later by the time you get there. You should have been Advised of this every time you enrolled into a scheme, although it may well have been buried in something you were given to read.

The best you can do (and what I would recommend, although of course this post isn't Advice) is to transfer the pensions to a personal pension, for example a SIPP, wherein you will be able to control where the money is invested. Most SIPP providers will gladly help you with such transfers.

Would it be beneficial to keep these smaller pots with their respected schemes

The reason I suggest transferring is that leaving the funds in workplace schemes that are no longer being contributed to is a surefire way of finding yourself invested in poorly-performing neglected funds, earning money for no one beyond the scheme provider.

  • Fully agree with this; I consolidated several defined contribution schemes I'd picked up with various employers in a SIPP... much, much simpler that way, and actually very easy to do. – timday May 3 '16 at 0:57
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    Agree with the general advice...one minor note of caution before transferring: some workplace pension schemes can have pretty low fund charges (at least compared to a "traditional" managed private pension). Might not be an issue if you plan to open a SIPP and do your own management in things like index-funds/ETFs etc., but just something to check. (And, if one particular "pot" does have a low rate for charges, it may be worth considering transferring all the small pots in to that one). – TripeHound 17 hours ago
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I'm assuming that all the savings are of 'defined contribution' type, and not 'defined benefit' as per marktristan's comment to the original question.

Aside from convenience of having all the pension money in one place, which may or may not be something you care about, there may be a benefit associated with being able to rebalance your portfolio when you need do.

Say you invest your pension pot in a 60%/40% of equities and bonds respectively. Due higher risk/reward ratio of the equities part, in the long run equities tend to get 'overweight' turning your mix into 70%/30% or even 80%/20%, therefore raising your overall exposure to equities. General practice is to rebalance your portfolio every now and then, in this case, by selling some equities and buying more bonds ("sell high, buy low"). Now if you have few small pockets of pension money, it makes it harder to keep track of the overall asset allocation and actually do the rebalancing as you cannot see and trade everything from one place.

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I'm in a similar situation to you, and haven't yet acted. However, my understanding of the situation I'm in is:

One of my pensions is a 'final salary' pension. It's also been under-funded, but I'm leaving it exactly as it is because if I make any changes to it, I can't ever go back to it.

Lots of my other pensions have been bought and sold over the years. A lot of them have ended up in Aviva, and so I think the best thing to do is to consolidate all of them into one of them. All of these pensions are 'self-select', in so much as I can change which of their funds the money is invested into. As such, I could go as far as to consolidate them all into one "account", but invest in the exact same funds as they are now (although this doesn't look terribly sensible in a couple of cases).

After that, I'm left with a couple at different providers, including two SIPPs. I plan to consolidate the two SIPPs into one, but leave the others where they are.

As mentioned elsewhere - find a way to keep track of all your pensions and providers. I've ended up with a spreadsheet which tells me the year-on-year gain of each of them, as well as noting the account details, provider name etc. I also tend to keep paper/PDF documentation too.

Lastly, I personally could not advise putting all your pensions into just one provider or account. My father was advised to do this, and was (he alleged) scammed out of most of his 'pot' by a fund manager who basically transferred the money into his own personal account (and subsequently killed himself). The case was never proven, but my goodness it was complicated - and of course, my father ended up with a lot less pension than he'd earned in his life as a result. I'm not suggesting the likes of Aviva, Zurich or whomever are prone to this sort of thing, but you never know what'll happen - and proving anything is incredibly hard. It's better not to be in that position in the first place.

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Your last sentence is key. If you have multiple accounts, it's too easy to lose track over the years. I've seen too many people pass on and the spouse has a tough time tracking the accounts, often finding a prior spouse listed as beneficiary.

In this case, your gut is right, simpler is better.

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