Should I amalgamate my pension pots?
If only pension advice was as simple as YES or NO
Q. Should I amalgamate / consolidate / combine / merge my pension pots?
A. If only pension advice was as simple as YES or NO
As you will have realised by now, it’s far from a simple Yes or No. This is partly due to the complexity of the ever-changing legislation, government simplification (interference), or even the legacy of old products from pension providers who no longer exist, plus some other things which must be considered like rules, features, charges, benefits for example.
However, this question has become more relevant since the Autumn 2024 Budget announcement that will bring pension savings back into an estate for Inheritance Tax purposes from April 2027.
Q. On the face of it, if you potentially have an IHT liability, does it matter if you’ve got 3, 5 or 10 different pension pots with 2, 5, 7 or 10 different providers?
A. No, it does not, because you won’t have to deal with them, because you will be dead. BUT, your personal representatives/executors must deal with them!
Q. How much easier would it be if they (personal reps/executors) only had to deal with ONE pension pot from ONE provider, especially given they will have lots of other things to contend with at the same time?
A. It would (definitely) be easier.
Q. So, to ask the question again; ‘should I amalgamate / consolidate / combine / merge my pension pots’? is the answer YES?
A. No, it’s probably more of a MAYBE – but what you should do is contact your usual financial adviser and have a discussion with them about this hot topic. You could potentially save your family and beneficiaries from some unwelcome stress in the future, but it is important that each pension is considered on its merits before taking a decision.