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Our pensions expert discusses the benefits of consolidating your retirement funds
Thursday 04 Jul 2019 Author: Tom Selby

I’m 53 and semi-retired, currently working part-time shifts as a paramedic. I’d like to retire to the country in 10 years’ time with my wife but need to work out what to do with my pensions first.

I have £150,000 in a policy which I took out in 1991 and which matures in 2021, when I’m 55. I also have a separate SIPP worth about £130,000. Our flat has been valued at £280,000 but I’d like to use at least some of my pension to buy somewhere bigger in the country so our children and grandchildren can visit.

The pension rules are so complicated I’m not really sure where to start, so any help you can provide would be greatly appreciated.


Tom Selby, AJ Bell Senior Analyst says:

Your first pension plan sounds like a with-profits policy which might be boosted by a ‘terminal bonus’ when it matures. These bonuses can be substantial, so once you’ve received it you’ll have a better idea of the value of your existing pensions.

Assuming there are no penalties involved, consolidating your pensions into one place can make them easier to manage. You can then start to think about things like investment strategy in retirement, how much risk you want to take and how you want to take an income in retirement.

Combining your pensions on a modern investment platform would enable you to manage your pension online and check its progress via a mobile app.  Investment platforms also give you access to a wide range of investments and you might be able to lower your charges too.

Your 10-year time horizon means you could consider investing in shares because you have time to ride out any short term volatility.  If you don’t want to select individual shares or funds yourself, platforms often have ready-made portfolios to get you started or fully-packaged investment funds that make all the investment decisions for you.

There will also be a host of information and tools to help you decide which investments are best for you based on your risk appetite.

You should think carefully before accessing your pension to pay for your future house move. If you take any taxable income from your fund you will trigger the ‘money purchase annual allowance’ (MPAA), meaning the amount you can save each year tax-free will drop from £40,000 to just £4,000.

The MPAA only kicks in when you take taxable income from your fund from age 55, so if you don’t want to dent your annual allowance one solution could be to use your 25% tax-free cash for any immediate spending.

It would also be worth figuring out a rough budget for your retirement, starting with essentials (e.g. utility bills, food) and working towards luxuries such as holidays and home improvements. You can then start considering how much pension you’ll need to pay for your lifestyle and whether you need to pay more in to reach your goals.


Send an email to with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide guidance and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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