Government Confirms Small Pension Pots Platform to Consolidate Small Funds

It is estimated that there are over 13 million pension pots in the UK with less than £1,000 in them.  This is because many people move jobs regularly and build up pension pots ranging from a little as £20 through to £999 then get forgotten, left behind or even disappear over the years with ongoing charges.  It is estmated that this also costs penssion scheme providers over £225 million per year to administer these small and dormant pots.

Small Pension Pots Platform will be created by the government to identify small pension pots worth £1,000 or less and will then be consolidated into one scheme per individual and is estimated to boost the average savers pensions funds by £1,000. 

The government will set up a suitable scheme, no doubt to be run by leading pension providers, to have low charges and be value for money for the pension saver.

Much in the same way as auto-enrolment for employees in employer based workplaced pensions, rules will be established forcing pension providers to identify any small pots, use the Small Pension Pots Platform to indentity an individuals default pension pot that the pension provider can transfer their small pot to.

Comment

This has been a long time coming and is long overdue.  This is 13 years after the first auto-enrolment workplace pension started and some

Anything that helps the consumer to identify and keep track of all their pension pots and not even have to think about consolidation, as it will be done automtically, will be welcome.