Policy & Research · By Daniel Whitcombe, Policy Manager, Savings Journeys · Published 9 June 2026
Auto-enrolment did something nobody quite planned for. By making a pension the default in every job, it also made a new pension pot the default in every job. The average worker now changes employer many times over a career, and each move can leave behind a small pot that gets a little more forgotten every year. The result is millions of stranded pots, most of them modest, all of them costing something to administer.
Why small pots are a genuine problem, not an inconvenience
It is tempting to see this as untidy rather than serious. It is serious, for four reasons:
- Fixed costs bite hardest on small balances. A flat administration charge is trivial on a large pot and material on a very small one.
- People lose track of their own money. A pot you have forgotten cannot be consolidated, cannot be reviewed, and may never be claimed at retirement.
- Fragmentation defeats planning. Someone with eight pots across eight providers has no realistic way of knowing whether they are on track.
- It undermines confidence. Pensions already feel opaque. Discovering you have several you cannot account for does not help.
Why it has not been fixed already
The obstacles are practical rather than philosophical. Transferring a pension between schemes involves matching records reliably, moving money safely, handling different charging structures, and doing all of it without accidentally building a superb new channel for scammers. Historically, transfers have also been slow and paper-heavy, which discourages exactly the people whose pots are smallest.
There is also a genuine tension. Automatic consolidation is efficient, but it moves someone's money without them asking. Any solution has to be built so that the saver is clearly informed, properly protected and never worse off as a result.
What a workable solution looks like
We support a system-level fix rather than leaving it to individual willpower. The building blocks are reasonably well understood:
- A default consolidator model, where eligible small deferred pots are automatically brought together into a small number of authorised, well-governed schemes.
- Pot-follows-member mechanics for new job moves, so the problem stops growing while the existing backlog is cleared.
- Pensions dashboards that actually work, giving people a single view of everything they hold before asking them to make a decision about it.
- Faster, digital-first transfers, measured in days rather than months.
- Strong value-for-money tests so that consolidation always moves savers towards better-governed, better-value homes for their money.
- Scam-resistant design, with verification built into the transfer route rather than bolted on afterwards.
What savers can do in the meantime
You do not have to wait for legislation. Track down old pots using the government's Pension Tracing Service, keep a simple list of every employer you have worked for, and always tell former providers when you move house. Before consolidating, check whether an old pot carries valuable guarantees or exit penalties — occasionally it is worth leaving something where it is. And be alert: anyone who contacts you out of the blue offering to consolidate your pensions is a warning sign, not an opportunity.
Where we stand
As a not-for-profit master trust we benefit from scale, so we are open about the fact that consolidation tends to suit large, well-governed schemes. But the reason we argue for it is simpler than commercial advantage. A saver with one clear pot understands what they have. A saver with nine tiny ones understands nothing, pays more than they should, and is far more likely to reach retirement with less than they earned.