Three old pension pots: keep them until you know what you own

For the same £20,000, assume 0.6% all-in each year across the old pots versus 0.3% all-in after a move into the same investment mix. These are illustrative assumptions for unknown plans, not provider offers. The lower charge is consistent with Nest's published 0.3% annual management charge, but that does not establish that this household has access to an all-in 0.3% replacement; new contributions to Nest also incur a separate 1.8% charge, which the provider says does not apply to transfers in. The actual comparison requires fund charges, account fees and any exit cost from both providers.

At the starting balance the illustration is £120 versus £60 annually, a £60 gap. The chart is one year at a fixed starting balance, not a forecast of future returns or evidence that consolidating always saves money.

A protected early-access age, a guaranteed annuity rate or an enhanced tax-free lump sum might be more valuable than £60 a year. GOV.UK lists rights that can be lost and advises checking both existing and receiving schemes. You cannot value an unidentified guarantee by assuming it is worth zero. Even with no special benefit, a £48 annual flat account fee at a proposed destination, if not included in the 0.3% assumption, would leave just £12 a year of the £60 illustrated gap. That £48 is a sensitivity assumption, not a quote for the receiving provider.

A 15-year flat-balance, flat-fee calculation produces £900 (£60 × 15) before any one-off cost. On the same terms, an assumed £90 transfer cost means 18 months to break even. No contributions to these old pots, no investment growth or withdrawals in either path: those simplifications make the fee test legible, but do not make it a retirement projection.

The order of operations matters. Request the scheme booklet and an individual illustration before authorising a transfer, particularly if a statement mentions a guarantee. Ask whether a protected right belongs to the whole scheme or only a portion of this account. A plan-specific retirement option may be unavailable at the destination even when its current investment is easy to replicate. In that situation the annual fee is the wrong unit for comparing the plans: the missing benefit needs its own valuation.

For this household, the live employer plan and all future contributions remain where they are regardless of the three old pots. GOV.UK explains that contributions depend on the scheme. There is no reason to put matching or salary-sacrifice arrangements at risk in order to simplify old accounts. The old pots still need attention: request each statement, log beneficiary choices and review the investment mix and retirement date on each account. GOV.UK's tracing service supplies contact details, not balances. Our old-pension tracing guide gives the practical sequence.

Keeping three indefinitely without reviewing them is not my argument. It is a temporary default while you identify what you would lose; the case for moving after those checks weighs the administrative benefit differently.

Three pots do create an administrative burden, but consolidation is not the only remedy. Set a yearly reminder to request statements from all three; keep the scheme names, contact routes and beneficiary nominations together in a secure place. Compare each fund’s asset mix, not merely the risk label. One old default may automatically adjust its portfolio as the selected retirement date approaches; moving to a fixed allocation changes risk as well as charges. For a household retiring at 67, check that all three schemes have the same target date before attributing any future balance difference to fees.

If each provider confirms there are no special rights, the receiver accepts each pot, the same mix is available and documented total charges are lower after all costs, the case for keeping weakens. If one pot has a guarantee but two do not, keeping that one and transferring only the plain pots may beat an all-or-nothing decision; check transfer rules first. A defined-benefit promise is not a small DC pot: the FCA cautions against losing guaranteed lifetime income. Ignore unsolicited pension transfer pitches; the FCA describes how pension review scams operate.

Make a separate decision for each pot. Two ordinary low-cost DC pots might rationally move while a third with protected terms stays. Ask the receiver and the old scheme whether they permit the exact transfer you intend: GOV.UK says to check both, including whether all or only part can move. If you are shown only an annual fee percentage, request a pounds-and-pence example for your actual balances and fund choices. A platform fee, a fund fee and a one-off transfer cost belong on the same comparison sheet; a guaranteed retirement benefit belongs in a different column.

This article is for informational purposes only and does not constitute financial advice. You should seek independent financial advice before making any investment decisions.