Are there limits to how many pension schemes I can have?

24th May 2012

Planning retirement is something that many people take a great deal of time and care with, as a result many people look at a range of different options as to where they may choose to invest their money and this can often involve using more than one pension scheme. Currently in the UK there are no rules around how many pension schemes a person can have, in fact it’s quite common for a person to have more than one pension scheme upon retirement.

With the availability of a State pension scheme and the popularity of a private pension scheme it is not unusual for a person to hold both. In fact if you have worked for more than one employer throughout your lifetime you may have more than one private pension scheme, and this means that when it comes to retirement time you may have a range of pension options to choose from.

What are the benefits of joining more than one pension scheme?

Security is one of the main reasons that a person may choose to join a number of pension schemes, in general spreading out an investment helps to reduce the potential risk of financial collapse. In addition, you may find that different pension plans offer different benefits to you and therefore it may be a more profitable experience for a person to hold several different pension schemes.

In general if you work within the UK for an extended period of time then you may find that you are eligible for a State pension without even realising it. Many people make National Insurance contributions throughout their lives which entitle them to this, but may choose to add a private pension scheme if they feel that the State pension scheme is not sufficient.

What are the disadvantages of joining more than one pension scheme?

There are a number of disadvantages to having more than one pension scheme, but in general the biggest disadvantage is the cost, if you are having several managed pension funds then you will be paying a number of different management fees, in contrast to having just one pension fund where you will be paying only one management fee. There may also be restrictions on how you can access your pension funds and what percentage you can take at any time.

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