Too often pension savers neglect old and poorer value pension products

Reforming workplace pensions through the lens of value for money and consolidation is to be applauded.

Too often pension savers neglect old, poorer value pension products, or else forget about very small pots.

Consolidation of these is beneficial for individual consumer outcomes as well as to the wider industry’s ability to serve customers appropriately and drive economies of scale.

For all the success auto-enrolment has brought in terms of embedding a pension savings culture, it has created a huge problem that sorely needed addressing.

With 13 million small pots holding £1,000 or less, and the number increasing by around one million a year, the industry was on an unsustainable path of fragmentation. Challenges lie ahead in terms of the implementation of a commercial model, but the direction of travel in terms of tackling this is encouraging.