18 July 2023

The Department for Work and Pensions (DWP) has released a response to the “addressing the challenge of deferred small pots” call for evidence. With this response is also a consultation on proposals to resolve the small pots issue.

The Summary of responses dives into the sentiments from the 52 respondents across the many categories of questions, including:

  • assessment criteria
  • market innovation
  • scope
  • potential solutions.

Moving on to the consultation, we now have some proposals for solutions and how they would work, It is now up to us to feedback our thoughts on these and shape them in the best way for everyone.

The questions ask:

  • if we need a central registry or a clearing house to facilitate transfers?
  • what happens when a member fails to choose a consolidator?
  • who can act as a consolidator?
  • How to we classify a pot as ‘deferred’?
  • Should same scheme consolidation be mandated?
  • Are there any other issues with a default consolidator approach?

Much like automatic enrolment, the solution needs to be as simple as possible for individuals, but with as little administrative burden upon employers and pension providers as possible. This consultation explores the ways in which this could happen and the potential consequences of these.

If this will impact you, your typical employee or your business, then we encourage you to dive deeper into this and respond. You can answer as many or as few questions as you like, every response is valuable. Have your voice heard and make a difference to government policy.

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