How many pensions can I have?

Thinking about your pension is similar to caring for a garden. Just as a garden can hold various flowers and plants, you might have different pensions. These could include ones from past jobs, any you've started on your own, and the State Pension, too.

But, unlike a garden that you need to keep an eye on all the time, your pensions mostly grow on their own, quietly getting ready for when you retire. 

In the UK, there's no limit to how many pension pots you can have. Keeping track of them can help you make sure you're saving enough for your future.

Pensions are plans that help you save money for when you retire. You pay into them throughout your working life and can then draw payments from them in the future after you retire.

There are a few types of pension that you may want to consider.

Workplace Pension

A workplace pension is one that your employer sets up for you. There are two main types: 

• Defined Benefit Pensions are plans where your employer gives you a certain amount of money in retirement. This amount depends on how much you earn and how long you’ve worked there. Find out more about defined benefit pensions.
• Defined Contribution Pensions are different. The money you get when you retire depends on how much you and your employer put in and how this money grows over time. Think of it as a savings pot that gets bigger the more you add to it and the longer you leave it to grow. Just bear in mind, the value of a pension can go down as well as up, which means you could get back less than the amount that's been put in.

Since the year 2012, most employers in the UK must set up a pension for their employees and pay money into it. This ensures that everyone has some money saved for when they stop working and is called automatic enrolment.

Personal Pension

A personal pension is a savings pot you start by yourself for when you retire. Your pension provider uses the money you save to buy things like stocks, bonds, and property. These investments are chosen with the aim of growing your pension pot over the years leading up to your retirement. 

The amount of money you get in the future depends on a number of things including; how much money you save into it, how well the investments do, the length of time you invest for and whether there are charges associated with your personal pension. There are a few different types you can choose from:

• A standard Personal Pension is the most basic type. You choose a pension provider (a company that offers pension services), and they help you to decide where to invest your money. You don’t need to be an investment expert; they guide you and manage your money. There is also the option to manage your own investments with a standard personal pension.
• A Self-Invested Personal Pension (SIPP) gives you control over where your money is invested. With a SIPP, you can choose from a wider range of investments, like stocks and shares or property. It's a bit like being the driver of your investment car, picking exactly where you want to go. There is also the option to have the provider help you to decide where to invest your money with a SIPP.
• A Stakeholder Pension is designed to be more straightforward and cheaper than other types. They have low and capped charges, and you can start and stop your contributions whenever you need to without penalty.

Each type of personal pension has its benefits, so it's all about what suits you best. Whether you want something simple and hands-off or you're keen to dive into more detailed investment choices, there's a personal pension out there for you.

State Pension

The State Pension is a regular payment from the government when you reach a certain age. It's based on your National Insurance record – essentially, how long you've worked and paid National Insurance. 

The amount you get from the State Pension depends on how many years you've paid or been credited with National Insurance contributions. For people reaching retirement age on or after 6 April 2016, you generally need 35 years to get the full new State Pension. 

However, not everyone needs the same number of years. If you started working and paying National Insurance before 6 April 2016, the rules are a bit different. The government will look at what you've paid in under both the old and new rules to work out your State Pension.

If you have at least 10 qualifying years of payments, you should get some State Pension, but it might not be the full amount. The more years you have, the more you get. Sometimes, if you were at home because you were ill, unemployed, or caring for someone, you might still get credit for those times.

To find out exactly how much State Pension you could get, the best thing to do is to check your State Pension forecast online. This will tell you how much you're on track to receive based on your work history and any credits. It’s a good way to see if you might want to add more qualifying years, if you can.

Yes, you can definitely put money into several pensions at the same time. This also means you can have several types of pension at the same time, such as a personal pension and a workplace pension. For state pensions, you have to pay the requisite national insurance contributions to be able to qualify for it.

Just remember, there’s a limit on how much you can save each year before you have to pay a tax charge. This is known as the annual allowance - read more about this allowance and tax on pensions here.

If you’ve worked at a few different places, you might have more than one pension. It can be tricky to keep track of them, but you can:

• Look through your paperwork or emails for any pension information.
• Ask your current and past employers about any pensions you had with them.
• Find out more about pension tracing and how Aviva can help you find lost pensions.

You have the right to have as many pensions as you want, so you might be thinking about opening some more. Having several pensions can be a good thing:

• You can spread the risk of your pensions. It’s like not putting all your eggs in one basket. If one pension doesn’t do as well, you’ve got others to fall back on.
• You’ll have more choices. Different pensions might offer different investment options or benefits.
• With workplace pensions, you can get more money added to your pensions from different employers.

If you have several pensions, you might find that they are difficult to manage. 

• With pensions in different places, it’s hard to keep an eye on how much you’ve saved in total.
• Some pensions, especially older ones, may have higher charges, which could eat into your savings.
• Different pensions might have different rules and options, which can be confusing and make it hard to decide the best way to save for your retirement.

Some people choose to simplify their pensions by combining them.

If you have defined contribution pensions you should be able to combine them, whether they’re workplace pensions or your own personal ones. Defined benefit pensions can also be combined but if the value of the pension is over £30,000, then it is important to seek financial advice. You should also speak to your employer before combining your current workplace pension, as they may not be willing to pay into it. You also can't mix the State Pension with other pensions.

Putting your defined contribution pensions in one pot can make life simpler. But it’s important to check for any valuable pension benefits you could lose or charges you may to pay when you transfer them. You’ll also need to look at the investment choices you’ll have with your new. That’s why we recommend you get financial advice first.

You can find more information about combining your pensions on our website. If you’d like to get started, you can use our Find and Combine tool to easily consolidate your pensions into a single Aviva pension.

What are the pros of consolidating pensions?

Putting your pensions together can:

• Make it easier to keep track of your savings.
• Potentially cut down on charges.
• Help you to manage your investments better.

What are the risks of consolidating pensions?

But there are downsides, too:

• You could lose valuable benefits from your old pensions.
• There might be fees for moving your money.
• Losing investment options specifically associated with your current pensions may mean you have a smaller fund when you retire.

Making your pension simpler to manage is important, but it's worth taking the time to make sure it's the right move for your retirement savings.

Think of your pension as a part of your future that you're building today. Whether it's the money your job saves for you, the extra pots you start yourself, or the pot the government gives you when you retire, they all add up to help you have a happier time when you stop working.

Starting to save early, making smart choices, and checking on your pension now and then can make planning for your later years much easier and even something to look forward to. The road to a comfortable retirement has many steps, but every step you take now helps a lot.

It’s not just about saving as much as you can; it's about making your savings do the best they can for you. With a little planning and some smart thinking, you can make sure that your retirement years are as good as they can be.