Automatic transfers consolidating pension savings

Posted by / 18-Oct-2015 11:01

Automatic transfers consolidating pension savings

An automatic transfer solution will show this growth in fund size and encourage engagement," she said.

Not everyone is impressed with the proposal however, EEF, the manufacturers’ organisation, said that the Government should have nominated a simple aggregator scheme to deal with the "small pot problem".

This risk is underlined by the fact that Government is buttressing the pot follows the member approach with new minimum standards for receiving schemes.

Kate Smith, regulatory strategy manager at Aegon, said that the introduction of an auto transfer system will allow many employees with small pension pots to consolidate their pensions easily as they move from job to job.

"We believe that as individuals’ pension pots grow, they become more engaged with pensions.

Without this new transfer system, the launch of auto enrolement could have resulted in an increased number of lost pensions.

One in four employees aged 25 to 34 has already worked for five to six companies, matching the average number for workers aged 65 or more.

Small pension pots of less than £10,000 will be transferable from one workplace retirement scheme to another as soon as 2015.

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Under the current system, each new job warrants a new pension, resulting in many workers belonging to several schemes.

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