Should I put my financial investments in one place?

From pensions to ISAs, it can be difficult to keep track of different investments, or get a complete picture of your finances. But should you consolidate them? Here Nutmeg savings and investment specialist Kat Mann explores the pros and cons so you can manage your wealth more efficiently

Consolidating your investments may make it easier to manage your money but you need to check the small print (Nutmeg)

Life admin. Whether it’s keeping on top of your household bills, checking for the most competitive insurance policies, or making sure you’re on track with your financial goals, it isn’t something most of us relish the thought of. And when it comes to our savings and investments, we’re probably even more inclined to put it off for another day. But could bringing your investments together in one place help you reduce your life admin and bring other benefits too?

You might think that transferring your investments to one provider is more hassle than it’s worth. But much like switching insurance providers or moving to a better current account, you shouldn’t feel that you’re stuck with the same savings and investment provider you chose years ago. Switching could be easier than you think, and spending a little time on it now, could really benefit you in the long-term.

Potential benefits of consolidating your investments

They may be easier to keep track of: Whether it’s keeping track of previous workplace pensions or remembering which provider you chose for your ISA five or ten years ago, keeping your investments with multiple providers increases the amount of paperwork and admin you need to keep on top of.

If you’ve had more than one job, then chances are you have more than one workplace pension. While, in theory, there isn’t anything wrong with leaving your old workplace pensions with your previous providers, combining them together with one provider can make them easier to keep track of.

This can be especially true if your workplace pension provider is a more traditional provider and only communicates with you via post – often only once a year for your annual report! This means if you move house, you need to remember to notify your old workplace pension providers, preferably before they post your statement! Otherwise, when it comes to retirement, tracking down your old pensions and remembering where you lived at the time could be both challenging and time consuming.

Choosing a provider that allows you to monitor your pensions online and/or via an app can ease your admin and make it quicker to update your details when you move.

Some people don’t realise that it’s possible to consolidate their ISAs with one provider – you can transfer cash and stocks and shares ISAs from previous tax years to your provider for this year. You can even transfer money you’ve contributed to an ISA in the current tax year to a new provider – you just need to make sure you transfer the full amount.

Just like with any old pensions, combining your ISAs with one provider can make it easier to keep track of them.

It can give you a clearer view of your finances: Your investments are, hopefully, helping you to reach your financial goals. Whether that’s building a financial buffer for future security, a specific goal for your retirement, your different investments are likely helping you to build the financial life you want in the future. Having them in one place can help give you a clearer picture of your finances, and to know whether or not you’re on track to reach your goals.

Some people will use different ISAs with different providers for different goals. For example, they may be using their stocks and shares ISA from last year for home renovations in a few years’ time, but this year’s £20,000 allowance is ear-marked for a child’s university fees or a dream sabbatical in five- or ten-years’ time.

When you set up a stocks and shares ISA with Nutmeg, you can create different pots and allocate each pot to an individual investment goal, be it a child’s education, a home purchase or a rainy-day fund. You can also choose what risk level and investment style is appropriate for each and split your ISA allowance across these pots as you wish.

When it comes to your pensions, even if retirement is some way off, consolidating your pensions with one provider can help you to understand if the amount you’ve put away already and the amount you’re contributing currently will allow you to retire when you want to, with the lifestyle that you’re hoping for. And if you’re a little off track, you can see the impact of increasing your contributions.

You may reduce your costs: While it is unlikely to be the most important factor when you’re making investment decisions, cost will be something that you consider as fees can erode the value of your returns over the long term, so it is worth shopping around.

Combining your investments with one provider can help you to reduce the fees that you’re paying. Some providers will even reduce the fees you pay the more you have invested with them. For example, at Nutmeg, the Nutmeg management fee clients pay reduces for amounts over £100,000 – regardless of whether the money is held in an ISA, pension, general investment account or Lifetime ISA. So, if you’re thinking of putting your old ISAs and pensions together, then moving your money to one provider could help you reduce your costs – meaning you keep more of your returns over the long term.

Things to watch out for if consolidating your investments

Before consolidating your finances, always check the terms and conditions to make sure you’ll be better off (Nutmeg)

There could be hidden exit fees: As unfair as it may sound, some providers will charge you a fee for leaving. While Nutmeg doesn’t charge an exit fee – although we hope you never want to leave us, if you do, we don’t think it’s right or fair that you’re penalised for it – some providers do charge exit fees, and they can often be hidden. If you’re unsure, it is worth checking with your provider so there are no nasty surprises before you transfer.

You may lose protected benefits: Some savings and investments – such as fixed term ISAs or defined benefit pensions – can have special benefits that are only protected if you keep your savings or investments with your provider. Before making any changes, it’s worth checking with your existing provider if there are any perks or benefits that you could lose by transferring away.

How do you transfer investments?

Transferring your investments to a new provider could be easier than you think. It’s important to use the new providers transfer service – rather than withdrawing the money and reinvesting it yourself. But the good news is that both your new provider and your existing provider should do most of the work for you.

Risk warning: As with all investing your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may be subject to change in the future. Please note that during any transfer, your investments will be out of the market.