A Financial Conduct Authority review in July 2026 found that some older pension products may offer poorer value than newer ones. But that doesn’t mean every old pension should be moved.

If you’ve got a pension from a previous employer or an old personal pension you haven’t looked at in years, you might be wondering whether it’s still working hard enough for you. It’s a question we hear regularly from clients approaching retirement.

The short answer: older doesn’t automatically mean worse, and consolidation isn’t automatically better. But it is worth checking.

Why the FCA is looking at legacy pensions now

The Financial Conduct Authority recently completed a multi-firm review of legacy pension products – older unit-linked and non-workplace pensions that were sold years ago and are still held by thousands of savers.

The findings were mixed. Some of these older products were found to deliver poorer value than modern alternatives, often due to:

  • Complex or layered charging structures – where multiple fees (provider, platform, fund) stack up in ways that aren’t always transparent
  • Outdated product design – limited investment options, inflexible drawdown rules or funds that no longer match today’s investment thinking
  • Data gaps – making it harder for providers (and customers) to assess whether the pension is still fit for purpose

That said, the FCA was clear: many older pensions still perform well. Some include valuable guarantees that would be lost if you transferred. The point isn’t to panic, it’s to check.

Five checks before you consider moving an old pension

If you’re thinking about transferring or consolidating an old pension, here are five things to review first.

1. Charges and total cost

Older pensions sometimes have higher charges than modern alternatives, but not always. What matters is the total cost: provider fees, platform fees, fund charges and any advice or wrapper costs.

When comparing, look at net performance (growth after charges), not just headline fund returns. A pension with slightly higher charges but better fund performance might still come out ahead.

What to ask: Can I get a clear breakdown of all the charges on this pension? How does the total cost compare to a modern alternative?

2. Safeguarded benefits

Some older pensions include valuable features that you’d lose if you transferred:

  • Guaranteed annuity rates (GARs) – the right to convert your pension into an income at a rate fixed years ago, often far better than today’s rates
  • Protected tax-free cash – entitlement to more than the standard 25% tax-free lump sum
  • Protected pension age – the right to access your pension before the normal minimum age (currently 55, rising to 57 in 2028)

These benefits can be worth thousands of pounds. Once you transfer, they’re gone.

What to ask: Does this pension have any guaranteed or protected benefits? What would I lose if I moved it?

3. Exit penalties and transfer values

Some older pensions, particularly with-profits plans, have exit penalties or market value reductions (MVAs) that reduce the amount you’d receive on transfer.

For most products sold after 2017, early exit charges for over-55s are capped at 1%. But older contracts may have higher penalties, especially if you’re transferring before a set date or during a market downturn.

It’s also worth noting that transfer value and fund value aren’t always the same. The amount you’d receive on transfer may be less than the headline figure on your statement.

What to ask: Are there any exit penalties or MVAs on this pension? What’s the actual transfer value today?

4. Investment options and performance

Older pensions sometimes offer a limited range of funds, or funds that no longer match your goals, risk tolerance or time horizon.

Compare the available funds with what you could access elsewhere. Look at performance after charges over 5 and 10 years, and consider whether the investment approach still fits your retirement plans.

That said, if the pension is invested in a fund that’s performing well and the charges are reasonable, there may be no advantage in moving.

What to ask: What funds am I invested in? How have they performed after charges? Are there better options available elsewhere?

5. Your personal situation and advice needs

Not all pension transfers are straightforward. In some cases, regulated financial advice is legally required:

  • If you’re transferring a defined benefit (DB) pension with a transfer value over £30,000
  • If you’re transferring a defined contribution (DC) pension with safeguarded benefits (such as GARs) and the value exceeds £30,000

Even where advice isn’t mandatory, it’s often sensible, particularly if you’re close to retirement, have multiple pensions, or need to think about tax, inheritance or drawdown strategy.

What to ask: Do I need regulated advice for this transfer? How does this pension fit into my overall retirement plan?

When consolidation can make sense, and when it usually doesn’t

Consolidation may help if:

  • You have multiple small DC pots scattered across old employers, and managing them is a headache
  • Your old pension has high charges and no valuable benefits
  • The investment options are limited or outdated
  • You want everything in one place for simpler retirement planning

Consolidation usually doesn’t help if:

  • Your pension has guaranteed annuity rates or other protected benefits
  • There are significant exit penalties that would reduce your transfer value
  • You’re being asked to transfer a DB pension — these decisions are complex and require specialist advice
  • You’ve recently received suitable advice to stay where you are

The key is not to assume that “new is better” or “old is worse.” Every pension is different, and the right answer depends on your circumstances.

How Celtic Financial Planning can help

We regularly help clients review older pensions as part of their retirement planning. Our process is straightforward:

  1. Gather the details – we’ll ask you to share statements and policy documents for any pensions you’d like us to review
  2. Assess the options – we’ll look at charges, benefits, investment options and transfer values, and compare them with alternatives
  3. Recommend a course of action – if consolidation makes sense, we’ll explain why; if staying put is the better option, we’ll tell you that too

If you’re unsure whether your old pension is good value, or whether consolidation is right for you, we’re happy to take a look.

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FREQUENTLY ASKED QUESTIONS

Check the total charges (provider, platform and fund fees combined), whether the pension has safeguarded benefits like guaranteed annuity rates, any exit penalties, the investment options available, and how performance compares after charges. The FCA’s July 2026 review found some older pensions offer poorer value due to complex charges and outdated design – but many still perform well.

It depends. Consolidation can help if you have multiple small pots, high charges or limited investment options. But it may not be suitable if your pension has guaranteed annuity rates, protected tax-free cash, or significant exit penalties. Regulated advice is required for transfers of defined benefit pensions or pensions with safeguarded benefits worth over £30,000.

Guaranteed annuity rates (GARs) are a feature of some older pensions that let you convert your pot into retirement income at a rate fixed years ago — often much higher than today’s rates. If you transfer a pension with a GAR, you lose this benefit permanently.

ou need regulated advice from a pension transfer specialist if you’re transferring a defined benefit pension worth over £30,000, or a defined contribution pension with safeguarded benefits (like GARs) worth over £30,000. Even where advice isn’t mandatory, it’s often sensible for complex decisions.

The FCA’s multi-firm review found that some legacy pensions, particularly older unit-linked and non-workplace pensions, deliver poorer value due to complex charges, outdated product design and data gaps. However, the FCA also noted that many older pensions still perform well, and some include valuable guarantees that would be lost on transfer.

Important information

This article is for information only and does not constitute personal advice. Pension transfers involve risk and may not be suitable for everyone. Safeguarded benefits, exit penalties and your individual circumstances must be considered before making any decision. Where applicable, regulated advice from a pension transfer specialist is required.