06 March 2024
While not a new announcement, or even an update to existing policy, Jeremy Hunt mentioned the future of pensions ‘small pots’ and the plans for employee ‘pots for life’.
The CIPP is working hard behind the scenes, alongside the Department for Work and Pensions, to help shape the future of these policy areas and ensure a proportional burden for payroll professionals.
Current plans include establishing a system in which small pension pots of under £1,000 that are inactive for more than 12 months are automatically consolidated. This aims to achieve better pensions adequacy for savers and to stop these pots being eroded by fees.
This work will also tie into the plans to allow a worker to nominate a pension scheme to pay all future automatic enrolment contributions into, reducing the proliferation of small pots.
These plans will likely take many years to come fully to fruition, however, the policy and process changes they bring will affect many payroll professionals across the country.
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