Three in five (60%) British workers have already had at least four jobs in their lifetime, with one in ten
(12%) over 55s having worked at more than ten different places according to NOW: Pensions.
As a result, over half (56%) have more than one pension pot and nearly one in ten (8%) have four or
more - a figure which rises to one in four (25%) for those aged over 55.
When it comes to keeping track of these pension pots there is room for improvement as almost a third
(32%) admit they don’t know where all their pension pots are and a quarter of those surveyed
confessed that they don’t always inform all their pension providers when they move house.
With all British workers over the age of 22 and earning more than £9,440 set to be automatically
enrolled into workplace pensions and increasing numbers moving jobs more regularly, the number of
pension pots each person has is set to grow exponentially.
To tackle the growing issue of small pension pots and to reduce the risk of these pots being forgotten
about, Pensions Minister Steve Webb is proposing that people’s pension savings should automatically
transfer to their new employer’s scheme when they change jobs.
Half of those surveyed (50%) said they would like to consolidate their small pension pots into one and
over a third (39%) said they would like their pension pot to automatically follow them when they went
to a new company rather than having to set up a new scheme with their new employer.
But, four in five (81%) said they would worry if their pension pot was transferred to a scheme which
didn’t perform as well as the old one and 86% said they would be concerned if their pot was
automatically moved into a scheme where the charges were higher. Concern over charges is even
greater for over 55s with 89% stating that they would be concerned if their pension pot followed them
to a higher charging scheme.
Morten Nilsson, CEO of NOW: Pensions, commented: “No matter how long you plan to stay in a
job, you should always save in the workplace pension plan. When you pay in, your company pays in
so it’s like getting a pay rise and the sooner you start, the greater chance you have of a comfortable
retirement.”
Nilsson continued: “Automatic enrolment will lead to an explosion in the number of small pension
pots. In most cases, having one big pot is better than having lots of small ones that can be eaten up
by charges. But, while there is a lot of logic behind your pension pot following you to your new
employer, it’s imperative that safeguards are put in place to prevent people’s hard earned pension
savings being automatically transferred into an unsuitable scheme with high charges.
“So that savers can feel confident that wherever their pot goes, it will always be in a scheme which
meets certain quality standards, we would like to see schemes used for auto enrolment officially
licenced.”
“The government also needs to ensure that the transfer rules and the processes are efficient so
members’ pots are not eroded by the costs of consolidation.”
Michelle Cracknell, chief executive, The Pensions Advisory Service said: “Each month The
Pensions Advisory Service receives around 200 calls and queries from people who are unable to
trace their pensions. The number of people who spend their working life with one employer are now
few and far between. As the NOW: Pensions research highlights, many people change jobs several
times over their working life and, combine this with moving house and people being automatically
enrolled into schemes, the risk of losing track of your pension is high. Until this issue is addressed,
the need for somewhere for people to get free, independent and expert help is more important than
ever.”
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