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Reasons to leave existing pensions where they are: huge exit penalties

Some pension firms charge extremely large fees if you want to move your money to another company.

Certain firms have sometimes charged 40% of the total value of your savings, for example. The exact figure will depend on when the policy was taken out and how long it has to run before it matures. In some circumstances the fee could be more like 5%, for example.

But there is an easy way to avoid paying a very high charge to move your money. Under rules introduced in 2017, once you reach the age of 55 the pension firm has to cap its exit charge at just 1%. If you discover that any of your old policies carries a large exit penalty, it is likely to be best simply to wait until you reach 55 before you transfer your money.

However, the cap does not apply to the reductions (called market value adjustments) that insurers and pension companies may apply when you want to leave a with-profits saving plan. This is dealt with in more detail here.

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