If you have had more than one full time job since 2012 you should have more than one pension.

Should you consolidate them into one and if so where and how?

If you have a defined benefit scheme, then the answer is almost certainly no.

Defined benefit pensions are usually from Government departments, councils, the NHS, the Corporation of London and similar bodies.

They will pay you a certain income from retirement until you die, and sometime they will continue to pay your spouse after your death too.

You don’t have control over how they are run but you have a lot of security and guaranteed income.

While you can apply to transfer out of these schemes and get a lump sum instead, there have been many cases where this proved to be a bad financial mistake. In all but unusual circumstances these pensions are financial foundations, which like the state pension, you should treasure.

However if you have a defined contribution pension it is a different story.

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With these pensions, which the majority of people working in the private sector will have, you are saving and investing to build up a “pot”.

This pot of money, when you retire, is crystallised and you can use it to buy an annuity (where you exchange your lump sum for a small monthly payment until you die) or invest it and draw regularly from the investments.

Annuities, while reassuring, have been delivering very bad value for retirees in recent years.

For most people investing the lump sum is the best way to go, especially if you have a well designed and properly managed portfolio.

If such a portfolio can drive better performance that is in your (and your adviser’s) control and is designed to meet your target retirement goals, then it makes sense to start sooner.

On this basis, consolidating your pensions now and every time you change jobs can make sense.

Infact it can compound into a significant gain if your original pensions were not well invested.

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But beware, consolidating your pensions into a “off the shelf” product can leave you no better off or even worse off.

With an “off the shelf” investment, the risk level is not geared to your retirement date, risk profile or circumstances, whereas a bespoke portfolio is.

The “off the shelf” consolidated pension may perform worse than some, or all, of the original pensions, and there is nothing you can do about it.

With a personal pension you can make changes at the annual review (or sooner in extreme circumstances), and you can target performance specially about your retirement age and financial goals.

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