I’m hoping to retire in the next five years. How do I get my pensions in order?

QI’M hoping to retire in the next four to five years and want to start getting a handle on where I am. I have an old personal pension, two old work pensions and my current work pension. All the old ones are small pensions as I only paid into them for a few years before changing employments. Can you please tell me how to best get them in some order?

AYOU are right to be doing this now even though it’s a few years until you retire as it’s not always easy to locate long-forgotten savings pots from years or even decades ago. You may have lost the paperwork or moved home and not received the updates. An old employer may have gone out of business, sold the business or the insurance company could have changed names. It can take a little bit of effort, but you should be able to track them down.

There is a logic to keeping all your pension savings in one pot. However, it’s not always a good idea. Before consolidating old pensions, you need to determine the value in each, how they are invested, what their risk profiles are like, whether there are any guarantees such as with a Defined Benefit pension, what annual charges apply and, finally, the retirement dates for each, which will determine when you can begin to access them.

Ultimately, though, you have three choices when it comes to an old pension pot: leave it where it is, move it into a personal retirement savings account (PRSA) or personal retirement bond, or transfer it to your current employer’s pension scheme.

The main advantage of consolidation is that it reduces the chance you will forget about anything, while making it far easier to track where you are invested. Another benefit is that you will be paying one set of management fees as opposed to an array. Potential disadvantages: Depending on your cashflow situation you may be better served by having a variety of pots with different drawdown dates as you could cash these in at various stages depending on how you’d like to retire.

Your current scheme may have very competitive charges.

You may have to pay any transfer or exit penalties for withdrawing your money from existing pensions. If there are charges it should be clear on your “leaving service options” letter. This letter will show both the current and surrender value of your pension.

A mix – Of course, there is nothing stopping you from consolidating some of your old pensions into a current occupational scheme, or separate PRSA and retirement bond, and leaving one or two where they are, if that makes the most sense in your case.

All employees should get a leaving service options letter from their HR department when leaving their job as it will save them from having to contact your old workplace later to source it.

If you want control, it might make sense to move to a personal retirement bond or PRSA in your own name. Otherwise, you should just move to your new employer’s scheme, which will cost less.

Finally, it is a great idea to get a professional to have a look at your existing pensions, to let you know where you are and check your funds against your investment profile. Growing the pot is most important in the early years but protecting it is more important as you get closer to retirement. Then even if you decide to do nothing at all with your old pensions, at the very least make sure that all the various administrators have your latest up to date contact details.

This article aims to give information, not advice. Always do your own research and/or seek out advice from a Financial Broker before acting on anything contained in this article.