Options to help workers have more money when they retire, including those with several small pension pots scattered around, are being looked into by the Government. With the average worker having around 11 jobs over the course of their career, some may end up with multiple small pension pots.
This creates a risk of people losing track of their savings as well as the admin costs and inefficiencies created for pension providers of maintaining them. A call for evidence on small pension pots has been launched Department for Work and Pensions (DWP), applying to England, Scotland and Wales, and will run until March 27, 2023.
It looks at the potential scope for the automatic consolidation of some pots, as well as recognising the impact of other actions, including enabling more member engagement, that could help. Two options which would automatically bring more pensions together include a default consolidator, where small pots would automatically be transferred into a scheme; and 'pot follows member', where a pension pot would follow an employee when they move jobs and automatically move with them to their new employer's scheme.
