Pensions fall into two broad groups, Defined Contribution schemes and Defined Benefit schemes.
Defined Contribution schemes build up a pension pot to provide you with a retirement income based on contributions from you, and maybe your employer as well. Your pot is put into various types of investments, including shares, and your pot at retirement is based on how much has been paid in and how well the investments have performed, less any charges.
The value of investments and the income from them can go down as well as up, so you may not get back what you invest.
Consolidating two or more Defined Contribution schemes is relatively simple, and that’s what we address here. Find out more about consolidation here.
Defined Benefit schemes pay a retirement income based on your salary and how long you have worked for your employer.
Defined Benefit schemes normally provide very valuable benefits and it is not usually in your interests to move these pensions, although it is possible. If you’re thinking about transferring out of a Defined Benefit scheme in order to access your pensions more flexibly you should consider your options very carefully and will often need to receive professional financial advice before you can do this.
It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our
transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly suggest that you seek advice from an authorised financial adviser.