A pension consultant consolidated multiple old pensions into one pot and accidentally lost a guaranteed annuity rate worth thousands. Andy Egwim warns that tidying up pensions can erase hidden benefits you don't notice until they're gone. Check what you're giving up before you transfer.
Consultant once told me she finally got around to consolidating her, you know, several old pensions from different jobs. So put them all together in one pot, one new pot, everything finally tidy. It sounds sensible. They said there was a problem. One of those older pensions had a valuable pension benefit attached to it. It's a guaranteed annuity rate, and it was considerably better than the rates that she could obtain elsewhere. But she hadn't checked that before transferring. And once that pension was transferred, that Malleable guarantee was gone permanently. She had assumed that making everything tidy automatically meant making things better. It doesn't. And that's the lesson. Before you consolidate an old pension, don't just ask, wouldn't it be easier if everything was in one place? The better question is, what am I giving up by moving it? Because convenience has a value, but sometimes so does the mess. Well, I hope you found that helpful. If you like practical financial education like this, follow Moneywise Doctor for more. Well, I'm running the Dr. Sparks X-Ray Workshop. If you comment X-ray, I'll send you the details.
