U.K. plans to make it easier for workers to take their pension pots with them when they change jobs were published today.
The changes will cut the number of lost pensions and give greater clarity on retirement expectations, pensions minister Steve Webb said in an e-mailed statement. Unclaimed pensions are valued at a total of 3 billion pounds ($4.7 billion), the Department for Work and Pensions said, citing its own research.
“We need a system where people build up worthwhile pension pots in one place rather than having lots of small pots all over the place,” Webb said. “At the moment, every time someone moves to a new job there is a risk that they leave behind a small pension pot which they lose track of. Our plans will mean that individuals get better value for their savings and bigger pensions as a result.”
Auto-enrollment into pensions, which starts this month, will be “undermined” if the funds are not portable, Webb said.
The “pot follows member” approach should halve the number of dormant pension pots by 2050, the department said.