Why consolidate at all?
The average UK worker now has several jobs over a career, and each may have left a pension behind. Bringing them together into one SIPP makes sense for most people: lower combined fees, a single login, one investment strategy, and far less chance of losing track of a pot. But consolidation is not always right - some older pensions carry valuable guarantees you would forfeit by moving them.
Best SIPPs to consolidate into
| Provider | Fee structure | Best for |
|---|---|---|
| Interactive Investor | Flat ~£155/yr + fund OCF | Large pots (£100k+) |
| Vanguard | 0.15% capped at £375 | Simplicity, Vanguard funds |
| AJ Bell | 0.25% (capped on shares) | Wide fund/share choice |
| Hargreaves Lansdown | 0.45% (tiered) | Service and tools |
| PensionBee | ~0.50-0.75% all-in | Fully managed consolidation |
The right choice hinges on pot size. On a large consolidated pot, a flat-fee SIPP like Interactive Investor is dramatically cheaper because the fee does not grow with your balance. On smaller pots, a capped percentage platform like Vanguard or AJ Bell can be cheaper. PensionBee suits those who want the whole transfer process handled for them.
Before you consolidate: check for these
- Guaranteed annuity rates (GARs) - some older pensions promise an annuity rate far above today's market. Transferring forfeits this; it can be worth keeping the pot where it is.
- Defined-benefit (final salary) pensions - these are usually best left alone; transferring out is rarely advisable and requires regulated advice above £30,000.
- Exit penalties - older policies may charge to leave. Weigh the penalty against future fee savings.
- Enhanced tax-free cash - a few schemes protect more than 25% tax-free cash, which a transfer can lose.
How the process works
You generally do not need to contact your old providers yourself - the new SIPP provider arranges transfers once you supply the policy details. Most are now done electronically within weeks, and transfers between defined-contribution pensions are normally cash-free of tax.
One pot makes retirement planning easier
Beyond the fee savings, consolidation pays off most when you reach retirement. Coordinating drawdown across five scattered pensions - each with its own login, rules and paperwork - is genuinely hard, and the risk of an inefficient or mistimed withdrawal rises. With everything in one SIPP, you can manage a single investment strategy, see your true total at a glance, and draw a controlled, tax-efficient income from one place. It also makes life far simpler for your family, who would otherwise have to track down and claim multiple pots after your death.
Watch the timing and stay invested
Most defined-contribution transfers happen "in specie" or as cash; where it is cash, your money is briefly out of the market while the transfer completes, so a sharp rise during those days would be missed. Modern electronic transfers usually take only days to a few weeks, minimising this, but it is worth being aware of when moving a large pot. Also confirm the new provider actually offers the funds you want before you move, and never sell out to cash "to be safe" while you decide - time out of the market is a bigger long-run risk than a few days of transfer limbo.
Verdict
The best pension to consolidate into is a low-cost SIPP matched to your pot size - Interactive Investor for large pots, Vanguard or AJ Bell for smaller ones - but only after checking for guaranteed benefits worth keeping. Compare wrappers in best value SIPP, see switching tips in best pension to switch to, and tally the fee savings with our pension calculator.