NOW: Pensions comments on pension pot proliferation

Troy Clutterbuck, CEO, NOW: Pensions comments on today’s ONS Occupation Pension Schemes Survey, 2018:

“Last year the number of occupational pension schemes increased by 4.5 million to a total of 45.6 million compared to 41.1 million in 2017. This is fantastic news as 9.9 million people are now saving into a private sector pension pot for their futures, but this also poses problems. There has been a significant increase in the number of preserved (deferred)* pensions reaching 13.6 million in 2018, up from 11.6 million the previous year.

“This spike is mainly a result of auto enrolment and changing employment patterns with people moving jobs more often than previous generations. With each new job comes a new pension pot and this pension pot proliferation shows no sign of slowing.

“The government left a gaping hole when it abolished short service refunds in 2015 and then subsequently decided not to give the green light to an automatic “pot follows member” transfers system. This has left the industry with a growing problem which can only be resolved by the government and industry working together to streamline pension savings.”

– ENDS –

*Preserved pensions = When active employee members cease working for the scheme’s sponsoring employer, they usually have a choice of what to do with the benefits accrued in the scheme. The default position for members is generally a preserved pension entitlement, where the rights remain in the scheme and a pension comes into payment at normal pension age. However, a short service refund may (depending on scheme rules) be offered for members with less than two years’ service in a defined benefit (DB) scheme and fewer than 30 days service in a defined contribution (DC) scheme.

For further information:
Amy Mankelow
NOW: Pensions
Tel: 07887 604640
amy.mankelow@nowpensions.com

Fenella Cuthbert
Cicero Group
0207 947 5327
fenella.cuthbert@cicero-group.com

Notes to editors

NOW: Pensions www.nowpensions.com @nowpensions
NOW: Pensions is one of the UK’s largest workplace pension providers with nearly two million members and tens of thousands of employers from a wide range of sectors. A company wholly owned by Danish pension scheme ATP; one of Europe’s largest pension funds. NOW: Pensions entered the UK market in 2011 with a simple and cost-effective workplace pension designed specifically with the auto enrolment market in mind.

NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods, SALT.agency