In stark contrast to the career trajectories of former generations, today most people will change their jobs – and perhaps even their careers – multiple times before they retire.
In fact, studies by Forbes & Morgan McKinley found the typical 42 year old will have changed jobs eight to ten times and change career six to eight times before retirement. Further evidence of job mobility is found in the 2018 Deloitte Millennial Survey with participants planning to leave their jobs within two years and only 28% planning to remain in their current job for five years or more.
So what do all these job changes mean for your pension pot? Or practically speaking, pension pots, given the likelihood they will accumulate each time you change your employer.
Multiple pension pots are not only messy but can make it difficult to keep track of their progress. Each will have a different fee structure, pension entitlements, fund choices and some may limit the control you have over your investments. Bringing this all together at retirement can be complicated and in the meantime, it can be difficult to calculate the retirement income you can expect to receive from multiple, smaller pots.
Combining multiple pots into one new plan can offer a range of benefits. Not only is it easier to estimate your retirement income from one pension, you might save money on fees through lower fund management charges and the elimination of policy fees. Importantly, one larger pot of money can be a great motivator to properly manage your retirement savings which can make a big difference to the amount you receive in retirement.
If you are thinking about consolidating your pension pots it’s important you get in touch with your Hennelly Finance adviser to discuss your options as there are a few things to consider first. Exit fees may apply (usually a percentage of the total amount in your pot) and you may lose benefits that are tied to your pension if you move your money from one scheme to another. We can help you navigate the pros and cons of consolidating your funds and provide you with advice on the best solution that fits your circumstances and lifestyle goals. Give us a call today on 091 670 123 to speak to a qualified financial adviser or visit our website for more information.