Customers of digital bank Monzo will soon be able to merge all of their old pension pots in the Monzo app.

Monzo has launched Monzo Pension, a tool which will allow customers to round up all their existing personal and workplace pensions and hold them in one place in their Monzo app.

The old pensions will be brought together in retirement funds managed by investment manager BlackRock.

Customers will be able to register their interest in Monzo Pension from today in the Monzo app, with the pensions tool being rolled out to customers over the coming months.

According to the banking app's research, 51 per cent of UK adults may not know how much they have across their pension pots for retirement, while 64 per cent have not merged their pension pots.

Monzo asked 2,000 people what would make engaging with their pension easier, and 38 per cent said a process that felt more accessible to manage alongside their everyday finances.

> Read more: Should you consider merging your pension pots?

How will Monzo Pension work?

Customers need to provide some details about where they have worked and when, and Monzo will then track down their old pension pots. 

There will be no limit on the number of pensions that a customer can combine.

The pensions will be merged together into retirement funds from the BlackRock LifePath Target Date Fund range.   

The funds chosen use the age a customer aims to retire as a guide, shifting from higher to lower-risk investments over time.

What are the fees for Monzo Pension? 

Monzo customers will pay 0.63 per cent of their pension's value in fees annually, comprised of a 0.45 per cent platform fee and 0.18 per cent fund fee. 

Monzo Perks and Monzo Max customers, who pay £7 and £17 a month for their accounts respectively, will pay a smaller platform fee of 0.35 per cent. 

There are no drawdown fees and no exit fees for Monzo pensions.

A customer with £10,000 in their Monzo Pension would pay fees of £62.91 a year, for example.

How do they compare to fees elsewhere? 

In comparison, Lloyds Ready-Made Pensions has an annual account fee of 0.3 per cent, or a minimum of £5 a month.

The ongoing investment charges are 0.24 per cent and there is a transaction cost of 0.14 per cent.

Pension Bee's fee structure decreases the bigger your pot is. Depending on the plan, pension savers will pay between 0.50 per cent and 0.95 per cent. This halves on the portion of your savings over £100,000.

Andy Smart, general manager of savings, investments and pensions at Monzo, said: 'We know from speaking with our customers that visibility and knowledge of their pension is low and anxiety is high - so we've designed Monzo Pension to solve exactly these pain points.

'Managing multiple pensions and planning for retirement is unnecessarily complex, which means people default to avoiding it and end up on the back foot. 

'Now our customers can get on the front foot and keep tabs on their future financial goals alongside the rest of their finances in the Monzo app - planning not just for today or next month, but for years to come.'

What to consider before merging your pensions

1. Fees on old and new pension schemes 

Higher charges can make a serious dent in your future returns.

2. Where are your pensions invested

Past returns are not a guide to the future, but you should investigate where your money will be held. Read our guide to carrying out a healthcheck on investments.

3. A private provider vs your work scheme

Pension consolidation firms have sprung up to help people manage all or most of their pensions in one place, and this can be cheaper as well as more convenient.

However, your current workplace scheme might have negotiated lower fees and rolling up your older pensions there might be even handier if you want to cut down on admin.

4. Large exit fees

Most default work pension funds are trackers with cheap charges these days. If you have a costly old pension with restrictive investment choices you could weigh the benefits of moving despite penalty fees.

But exit fees are capped at 1 per cent after you reach the age of 55, so it might be worth waiting.

 5. Ongoing employer contributions

 Ongoing employer contributions You will be getting free employer contributions into your current work scheme, and you don't want to lose that cash coming into your pot.