Should you consolidate your investments for simplicity?
Simplicity is usually treated as a cosmetic preference, and in retirement it is a structural one. A portfolio spread across nine accounts and forty funds has to be operated by you in your eighties, and eventually by an attorney or an executor who has never seen it before.
- The reason: the plan has to be operable by you later and by someone else eventually.
- The method: one provider where possible, and a handful of broad funds.
- The exception: anything carrying a guarantee, a protected age or a small pots exemption.
- The limit: the £85,000 FSCS deposit cover, which applies per institution on cash.
01 Who has to operate it
A portfolio has to be manageable by the person holding it at 85, not only at 65. Nine accounts, four providers and forty holdings is an administrative load that grows harder every year, at exactly the point when capacity to handle it declines.
It then has to be manageable by someone else. An attorney acting under a lasting power of attorney, or an executor, starts from nothing and has to find everything before doing anything — and a document list helps only if there is something manageable to list.
That is the real case for simplicity, and it is a risk argument rather than an aesthetic one. Complexity fails at the moment it is least able to be fixed.
Source: Lasting power of attorney
02 What consolidating actually improves
One provider means one asset allocation view, one rebalancing decision, one set of charges to monitor and one beneficiary nomination. It makes the household-level view possible at all, which is what allows rebalancing to happen where no tax arises.
Fewer funds does the same for the investment side. Three broad index funds cover global equities, bonds and cash more thoroughly than forty overlapping ones, and the forty create an illusion of diversification while holding the same companies repeatedly.
Charges usually fall too, though that is the smaller benefit and it is the one most often used to justify the exercise.
Shows: the charge difference across a consolidated portfolio, and the number of accounts someone else would have to find. Ignores: guarantees, exit penalties, transfer time out of the market, and FSCS limits.
On the defaults above, the worked example shows £1,470 a year. And 9 accounts becomes a number an attorney or executor can actually work with — which is the benefit that does not show up in a charge comparison.
03 What not to consolidate
Anything carrying a guarantee. A guaranteed annuity rate, a protected pension age, a scheme-specific right to more than 25% tax-free cash — each of those is worth more than the simplification and each is destroyed by transfer.
Small pension pots under £10,000, where the small pots exemption still matters to someone contributing. Merging them destroys an exemption that cannot be recreated.
And cash above £85,000 with a single banking institution, because FSCS deposit protection is per institution. That is the one place where holding more accounts is the correct answer.
Source: Transferring your pension
Simplicity gets treated as a preference and it is a risk control. Ask who operates this portfolio when you are 85, and who operates it when you cannot — because an attorney or an executor starts with nothing and has to find nine accounts before doing anything at all. Three broad funds with one provider is not less sophisticated than forty holdings across four platforms; it is a plan that still works when the person who built it is not the one running it. Keep the guarantees, keep the small pots, and consolidate everything else.
FAQ
Is simplifying worth it if the charges are similar?
Yes. The main benefit is operability — by you later, and by an attorney or executor eventually — rather than cost. Complexity fails at the point capacity does, which is when it is least fixable.
How many funds do I need?
Very few. Three broad index funds covering global equities, bonds and cash provide more genuine diversification than forty overlapping ones, which frequently hold the same companies several times over.
What should stay separate?
Anything with a guarantee, a protected pension age or a scheme-specific tax-free cash right; small pension pots under £10,000 if you are still contributing; and cash above £85,000, which needs to be spread across institutions for FSCS protection.
Sources
Regulator references
- Lasting power of attorney · GOV.UK · 2025The two types of LPA and what each one lets an attorney do.Last verified: 2026-09-07
- Individual Savings Accounts (ISAs) · GOV.UK · 2025The annual subscription limit and the rules on transfers between ISAs.Last verified: 2026-09-07
- Transferring your pension · GOV.UK · 2025The transfer rules, including the advice requirement on safeguarded benefits.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.