PensionBee, a leader in the consumer retirement market, has issued a statement following the release of the Department for Work and Pensions’ Small Pots Delivery Group’s report, which lays out a clear framework for consolidating small pension pots.
Lisa Picardo, Chief Business Officer UK at PensionBee and a member of the Small Pots Delivery Group Tech and Admin Panel, shared her views on the report, stressing that these reforms are crucial for addressing the challenges faced by pension savers and improving the overall pension system.
Lisa also emphasised the importance of implementing key recommendations, such as a Small Pots Data Platform, to create a more streamlined and consumer-friendly process for consolidating small pension pots, benefiting savers in the long run.
Lisa Picardo, Chief Business Officer UK at PensionBee, said:
“The publication of the Small Pots Delivery Group’s report marks a significant and welcome step forward in solving one of the most pressing challenges in today’s pensions landscape.
The report sets out a clear roadmap for how the industry and Government can begin to consolidate millions of small, deferred pension pots, starting with those worth under £1,000, and introduces a framework that puts the interests of savers at its core.
Since the introduction of Auto-Enrolment, there are now estimated to be a stock of 13 million small pots that have been created since the introduction of AE that will need to be consolidated, with an estimated additional 1 million further small pots created annually.
Without targeted reform, this number will continue to grow, making it harder for people to keep track of their savings, while also increasing the cost and complexity of pension provision.
The report rightly identifies the need for a statutory duty on schemes to consolidate eligible small pots and sets out supporting measures such as the development of a central Small Pots Data Platform and an authorisation regime for consolidators.
These are vital foundations for a more streamlined, consumer-friendly system.
It is particularly encouraging to see an emphasis on robust data standards, operational readiness, and strong governance to ensure the solution delivers genuine value for money.
Consolidation is not just a technical fix. It is about helping people take control of their retirement savings - avoiding unnecessary charges, avoiding losing their hard-earned savings - and enabling the achievement of better retirement outcomes.
The current system, which sees a new pension pot created each time someone changes jobs, is no longer sustainable in a modern labour market.
As the report acknowledges, this reform is not just about tackling today’s backlog of small deferred pots; it must also prevent the same problem from recurring.
That means future-proofing the solution and ensuring that consolidation can happen by default, without friction or delay.
We urge the Government to move quickly to legislate and implement these proposals. With the right policy, technology and national educational campaign in place, this reform has the potential to significantly improve retirement outcomes for millions of savers across the UK.”
