Kelly Parsons, Head of DC Proposition at Broadstone, commented: “These figures show how the small pots issue is being driven by a more mobile workforce, with employees moving jobs, being automatically enrolled into new schemes and leaving pension pots behind rather than consolidating them. This is now becoming a structural feature of the pensions system and is yet another challenge to retirement planning and adequacy. While the small pots issue is often discussed as an industry or provider challenge, it is increasingly becoming an employer issue as well. Employers are automatically enrolling new joiners who may already have multiple pension pots which increases administration, adds complexity to scheme governance and can make it harder to engage employees with their retirement savings. As the number of deferred pots continues to grow, employers will need to play a bigger role in helping employees understand their pension options, including consolidation, and ensuring their workplace pension remains competitive, well-governed and delivers good member outcomes. This also strengthens the case for wider policy solutions such as small pots consolidation and pensions dashboards to reduce fragmentation across the system.”
Maurice Titley, Commercial Director Data & Dashboards at Lumera: “The fact that deferred memberships are growing far faster than active memberships shows that job switching, rather than new savers entering the system, is now the major driver of growth in pension pot numbers. As the labour market becomes more flexible and careers involve multiple employers, this means that individuals are building up multiple small pension pots over time. This trend will continue to increase administrative complexity and raise costs for providers while it can also make it harder for savers to keep track of their retirement savings, increase fees through duplicated charges and ultimately lead to poorer retirement outcomes if pots are lost or forgotten. This is exactly the issue that the Money Helper Pensions Dashboard aims to solve by giving savers a clear view of all of their pension savings in one place. This should stimulate greater retirement planning, encourage consolidation and support savers in their decision-making processes. The increase in both employee and employer contributions is an encouraging sign that pension saving levels are continuing to rise, reflecting both wage growth and the maturing impact of automatic enrolment. As contribution levels rise over time, the importance of consolidation, data quality and digital infrastructure becomes even greater. Implementing best-in-class software and administration platforms will be essential to help providers manage this complexity while still delivering good member outcomes.”
Funded occupational pension schemes in the UK: April to September 2025
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