• Jaskarn Pawar

5 reasons to switch pension providers to boost your retirement savings (and 3 things to do first)


Do you know who your current pension provider is? If so, do you know why you chose them? Even when you’re making regular pension contributions, these may not be things you think about that often. While, in many cases, your employer simply chooses your pension provider and you stick with them, you may want to consider switching.


Over time, your pension is likely to become one of your largest assets and key to your long-term plans. A regular review, and switching when necessary, can help you get the most out of your savings.


Here are five reasons you may want to switch pension providers:


1. Lower pension charges


You’re likely to pay some charges for your pension, which covers the cost of administering your pension and investing. This may be a flat fee or a percentage of your pension. If you’re not sure what fees you pay, it’s worth taking a look. Different providers will also refer to charges differently: some may have an “annual management fee”, while others will have a “policy fee”.


The fees you pay directly impact the amount that’s left in your pension and, therefore, the amount you can use in your retirement. In some cases, it can make sense to switch to a provider with lower fees. This is often true for smaller pensions, particularly if the provider uses flat fees.


2. Improved investment performance


As pension contributions are invested, their performance is important too. Seeking a pension provider that will deliver a better performance can put you on track for a more comfortable retirement.


There are several questions to ask here. Have you reviewed the different funds offered by your provider? And are you invested in the right one for you? Finally, are you taking a long-term view? Remember: you’re investing over decades so you should take a long-term outlook rather than focusing on short-term movements.


3. Choice from a wider selection of funds


Pension providers will usually have a selection of funds for you to choose from. These will typically reflect different risk profiles, allowing you to control how much risk you take. Some may also offer ESG (environmental, social and governance) or other focused funds. The fund you choose will affect how your pension is invested.


If your current pension provider doesn’t offer a fund that suits you, you may decide to switch. However, most pension providers offer a good selection that is suitable for the majority of pension savers.


4. Greater control over your investments


If you want greater control, you may be considering switching to a SIPP (self-invested personal pension), which allows you to select investments and choose from a greater range of assets.


You have more control, but you also need to take more responsibility for your retirement savings. A SIPP can be useful in some circumstances but it’s not right for everyone. If you’d like to discuss whether a SIPP is the right option for you, please give us a call.


5. Make your pensions easier to manage


How many pensions do you have? If you’ve switched jobs a few times, you can end up with several pensions that you’re no longer paying into. This can mean you’re paying more in charges and make it difficult to manage your retirement savings. Consolidating pensions means your savings are all in one place.


3 things to do before you switch your pension


Before switching pension provider, consider these three things to ensure it’s the right decision for you:


  • Check the benefits of your current scheme: Some pensions come with valuable benefits. This is often the case with defined benefit (DB) pensions, but some defined contribution (DC) pensions will also have benefits. These could include being able to access your pension sooner or providing a pension for your spouse or civil partner. Make sure you check first – you will lose these benefits if you transfer out of a pension.

  • Review exit penalties and entry charges: In some cases, you won’t have to pay additional charges when transferring your pension, but you should always check. There may be fees from the current provider and the one you’d like to switch to.

  • Get advice: The decisions you make about your pension could affect your income and lifestyle throughout retirement. You should take advice before moving forward.


If you’re thinking about switching pension provider, please contact us to discuss your options and retirement goals.


Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.


A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.


Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

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