There is no restriction on the number of pensions you can have. However, annual and lifetime limits exist on how much you can contribute to your pension while claiming tax relief. It is common for people to have multiple pensions during their lifetime, and often, these get lost over the years, particularly during probate. Here, we look at how many pensions you can have.
Personal Pensions
A personal pension is a sort of pension that you can set up on your own and is popular among self-employed individuals. Self-Invested Personal Pensions (SIPPs) are one type of personal pension. There is no limit to the number of personal pensions you can set up and contribute to.
Work Pensions
A workplace pension is a form of pension established by your company. Since 2018, employers have been forced to enrol their employees in a workplace pension automatically, and the number of workplace pensions people accumulate during their working lives is growing.
You can join more than one employer’s employment pension programme. If you work for multiple employers, each must determine if you are eligible to participate in their workplace pension system. If you meet the eligibility requirements, you will be registered in their workplace pension. If you were not automatically enrolled, you apply to join.
Potential Issues With Having Multiple Pensions
Because of current auto-enrolment rules, you will almost certainly have multiple pensions if you work more than one job in your lifetime. However, while having many pensions may appear to be a positive thing, there are substantial downsides:
- Fees might vary greatly amongst providers, so you may pay more than necessary.
- Each pension plan has a unique investment strategy, so having many pensions may dilute their overall efficacy.
- Managing and tracking the performance of various pensions is inefficient and time-consuming, and you may lose track of older pensions over time.
- After you pass away, your loved ones may struggle to locate your pensions, leading to lost and unclaimed pensions. If you think a deceased loved one may have lost assets, Fleetwood Asset Hunters can help.
Should You Consolidate Your Pensions?
It’s easier to maintain a single pension, fees are more transparent, and you may select the pension plan that best suits your needs. However, you should verify your existing pensions to see if you would lose any benefits if you move them to another provider.
Contact Fleetwood Asset Hunters on 020 8432 3101.