Department for Work and Pensions
Government reforms to stop savers losing ‘mini’ pension pots
A new system to stop workers losing their small pension pots as they move from job to job is due to start in autumn 2016.
A new system to stop workers losing their small pension pots as they move from job to job was outlined yesterday (11 February 2015) by the Minister for Pensions Steve Webb.
The update on the implementation of automatic pension transfers, or ‘pot follows member’, sets out how, under the new system, various small pension pots which a worker may have accumulated from different jobs will be able to be consolidated within their current employer’s pension scheme.
Due to come in from autumn 2016, workers will initially be offered the option of consolidating their pension pots, before an automatic system is rolled out.
Over 5 million employees have already been automatically enrolled into a workplace pension scheme, and this will increase further as small and micro employers are brought into automatic enrolment over the next 3 years.
Minister for Pensions Steve Webb said:
If we fail to take action there could be over 50 million dormant pension pots drifting away from savers by the middle of this century – that’s billions of pounds floating around that should be funding better retirements for people.
Auto enrolment is helping people to save for retirement, but we must help them to keep their pots together so they know clearly that their pension is growing for their future. With the average person now having 11 jobs in their career, this further reform is essential.
I want to introduce ‘pot follows member’ as soon as possible so we don’t lose the momentum that automatic enrolment has delivered in turning around pension saving in Britain.
The update paper follows 9 months’ work with a wide section of the pensions industry to analyse different options to create a safe and efficient model that works in the interest of workers saving for their future.
Under the plans, automatic transfers will first apply to a limited number of larger schemes – covering the vast majority of pension scheme members in the country.
The first stage will introduce automatic matching of an individual’s mini pots.
A person will be contacted to confirm if they want these pots to be moved to their new scheme – with an initial opt-in system introduced first ahead of a full opt-out model.
The aim is to have an automatic pot-matching system in place by autumn 2016.
More about automatic transfers
Read the written statement from the Minister for Pensions Steve Webb on‘Automatic transfers: A framework for consolidation pension saving’
Contact Press Office
Media enquiries for this press release – 0203 267 5123
London Press Office (national media and London area enquiries only – not questions about personal claims) 020 3267 5144
Out-of-hours (journalists only) 076 59 108 883
England and Wales (local media enquiries) 029 20 586 then 097 or 098 or 099
Scotland (local media enquiries) 0131 310 1122
Follow DWP on:
- Twitter – www.twitter.com/dwppressoffice
- Facebook – www.facebook.com/dwp
- LinkedIn – www.linkedin.com/company/dwp
- YouTube – www.youtube.com/dwp
Latest News from
Department for Work and Pensions
Claimants are asked to apply online as jobcentres limit access24/03/2020 14:20:00
People are being urged to use online services before turning to the telephone for help with their benefit claim.
Coronavirus update - benefit reviews and reassessments suspended24/03/2020 10:38:00
Reviews and reassessments for disability benefits are being suspended for the next three months.
Two years wage growth19/03/2020 12:10:00
Yesterday’s figures from the Office for National Statistics show more people in work, while wages have now been outpacing inflation for 2 years.
Face-to-face health assessments for benefits suspended amid coronavirus outbreak16/03/2020 15:10:00
Claimants on disability benefits will no longer be required to attend face-to-face assessments. The change also covers health checks for Universal Credit.
Coronavirus support for employees, benefit claimants and businesses16/03/2020 10:10:10
A range of extra support and measures will be in place to help workers, benefit claimants and businesses affected by coronavirus.
Statement from DWP on coronavirus (COVID-19)10/03/2020 10:10:10
Thérèse Coffey, the Secretary of State for the Department for Work and Pensions, yesterday made an oral statement to Parliament about the coronavirus (COVID-19).
Sick pay from day one for those affected by coronavirus05/03/2020 12:10:00
Statutory Sick Pay will be made available from day one when self-isolating, instead of day four, the Prime Minister yesterday announced.
Next step for new service for benefit assessments announced03/03/2020 13:10:00
A single service to deliver all disability benefits assessments will be trialled before being rolled out nationally, the Government has announced.