Pension consolidation services like PensionBee shake up ‘lax and comfortable’ providers

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Pension consolidation is becoming a popular service for Britons. PensionBee is one provider of this service.

Chris Ball, a financial advisor, told pension consolidation services are a welcome competition in the pensions industry.

When asked if traditional service providers should feel concerned about the increasing popularity of services like PensionBee, the CEO of Hoxton Capital Management told “Do I think that would be a bad thing? Probably not, because it will probably make a lot of them raise their games.

“I think a lot of them have gotten very lax and comfortable with the positions and they’ve not developed or improved their offerings over time.

“If they had improved their offerings and remained competitive they wouldn’t have to worry about those sorts of things.

“I think it’s a wake-up call for them and I think that’s good.”

Does he recommend consolidating your pensions?

“People of this are generation can work in 10 to 12 different companies very easily, and accumulate a pension for each one,” Christ detailed.

“It’s difficult to manage them and so wrapping them up from an administration point of view, having them all in one place, is definitely better.

“From a management point of view, too, in terms of investments, again trying to manage 12 different pots in the investments rather than in one place is difficult.

“So, I can definitely see the benefits of consolidation.”

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However, he does have a warning before people make the swap.

He said: “It depends upon what scheme you have with your employer.

“If you’ve got a final salary pension scheme it might actually be better just to leave that where it is and then just consolidate the bonds.

“If your defined contribution pension has got different rights attached to it, including tax cuts, if you move that you might lose it. So make sure that it does work to move it.

“Legal and General’s or whomever your pension is with will be able to tell you if there are any rights for your pension or if it’s just a bog-standard pension scheme, the same as you are moving into.

“It’s important you check that before, or you may lose benefits that you would have been entitled to.”

Free and impartial information about transferring pensions can be found at the Money Advice Service and the Pensions Advisory Service.

Chris also gave insight on investing your pension. 

Chris said: “You want to keep a minimal amount in cash because it’s sitting there not doing anything.

“The rest should be invested in and you need to structure the investments how you see the best.”

He said: “A younger person I would be encouraging, if you’re investing your pension, for example, invest more in equities now because you’ve got a long way until you get to retirement.”

For older Britons, who are looking at retirement, investments should be more cautious and lower risk.

“Somebody who’s closer to 60 I would say invest in more cautious assets as they’re going to be less volatile.”

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