Guide · 2 September 2025
Reading the Small Print on Old Workplace Pensions
Guaranteed annuity rates and exit charges still hide in older schemes. Before consolidating, check what you might give up.
Many clients arrive with three or four deferred workplace pensions from earlier jobs. Combining them into one pot can reduce paperwork and sometimes charges — but older schemes occasionally hold valuable guarantees that transfer would erase.
Look first for a guaranteed annuity rate (GAR). If present, the scheme may convert your pot into a retirement income at a rate far above today's open-market quotes. Moving away from that guarantee for a lower annual management charge can be a costly mistake.
Exit penalties and market-value reductions also appear in some older contracts. A consolidation review should list each scheme's transfer value, ongoing charges, and any protected benefits side by side before a recommendation is made.
We treat consolidation as a decision, not a default. The right answer is the one that preserves valuable features while still making your retirement income easier to oversee.