The Department of Work and Pensions (“DWP“) has begun consulting on a proposal to implement the automatic consolidation of deferred small pots through the establishment of consolidator schemes.
At present, the DWP estimates that there are approximately 13 million such pots across the defined contribution pension scheme market. The intention is that automatic consolidation of these pots will both reduce administration costs for schemes but also improve pension outcomes for scheme members.
The consultation is aimed at pension scheme providers; trustees; scheme managers; members of workplace pension schemes; employee representatives; trades unions; consumer groups; employers and employee representative groups; pension industry professionals; and members of the advisory community and any other interested stakeholders and will remain open until 17 November 2026.
The DWP then intends to respond to the input received within 12 weeks of the consultation closing date.
Duncan Scott
Duncan is a Principal Associate in the Funds and Financial Services team specialising in financial services regulation. Duncan advises clients across a wide range of sectors including banking, consumer finance, payment services, insurance, asset management and pensions with a particular focus on retail banking, regulated credit and payment services.