Consolidating multiple pensions into one pot could save over £140,000, new research from Quilter has revealed.
With the average person working for six different companies during their lifetime, they will accumulate at least six different pension pots as a result of auto-enrolment.
However, to achieve a comfortable retirement of £33,000 a year from age 65 to 95, savers will need to have a pension pot of around £500,000.
According to Quilter, a pension saver with six pension pots with six different providers and around £83,300 each in each, with annual fees ranging from 1% to 2.5%, could expect to have £1,076,852 after 20 years if they consolidated them all to the cheapest pot compared to £936,747 if they choose not to consolidate.
Ian Browne, pension expert, Quilter, said that while more people are saving for retirement due to the introduction of workplace pension schemes, these pots can lay dormant for years with annual charges decreasing their value.
Browne said: “With a huge variety of different annual charges seen across the pension industry it is essential that pension savers understand what charges they are paying and whether they can consolidate their multiple pots into the most efficient and best value one as over the long term this can make a material difference to how much they will have in retirement.
“The upcoming pensions dashboard may help users find and consolidate their pots. However, figuring out what represents the best pension pot for you isn’t solely down to fees and so it’s vital to get financial advice.”