Small pension pots to be automatically combined in future under Government plans

MSE_Emily

If you have a number of small pension pots you've built up over years of changing jobs, they may be automatically combined in future under new Government plans...

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Small pension pots to be automatically combined in future under Government plans

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Marcon

A loop we seem to have been round before eg 'pot follows member'...

Silvertabby

......here we go.  Many people will read this, think that they no longer have to bother about keeping on top of their pensions "because someone else will do it all for them"  and then witter on about their missing pensions when they reach retirement age.

tacpot12

If the Pensions Dashboard that has been mooted comes to pass, then having a 'Combine' button within the dashboard and using the Dashboard to recommend people consolidate these small pensions seems a good idea. It's also a good thing for employers who will have less work to do work processing change of address notifications from the people who are keeping a list of their pensions. 

LHW99

The thing is:

Fees? If a percentage you can still pay the same total fees with multiple small pots as one consolidated on, unless the consolidators can actually keep fees low.

Funds? will whats offered actually be any better then too many of the "default options" - which haven't been all that good.

Transfers? Opting out of the process is to be allowed, but once the funds are hoovered up, will it be possible to transfer them out into a workplace ( or other pension) if the person does take more interest in future?

Albermarle

These changes will apply to defined contribution pensions, but not defined benefit pensions. We're checking whether self-invested personal pensions will be impacted

This statement in the article is a bit confusing , as SIPPs are Defined Contribution pensions.

DRS1

Is anyone going to want to be a consolidator?  If the limit is £1000 then the combined pots are likely to be very low £000s.  As Mr Webb says better to consolidate into the current employer's scheme (assuming there is a current employer).

MeteredOut

Albermarle said:

These changes will apply to defined contribution pensions, but not defined benefit pensions. We're checking whether self-invested personal pensions will be impacted

This statement in the article is a bit confusing , as SIPPs are Defined Contribution pensions.

I suspect the author is conflating DC plans with employer/stakeholder pensions. I could see it making sense that pensions created on behalf of employees be included, but SIPPs, which are generally (always?) taken out by the individual, and not the employer, would not be, on the assumption that the those individuals are a bit more in control of their finances.

JoeCrystal

It seems reading the document about it, they are only focusing purely on pension pots that were created due to auto enrollment potentially. But I may be wrong on that.

LHW99

Hope they sort out transfer times before it becomes the default

https://www.moneymarketing.co.uk/news/broken-trust-and-1000-day-delays-report-reveals-scale-of-pension-switching-crisis/

If IFAs suffer these sort of delays, what hope for the rest of us!