Small pots problem
Aegon’s head of pensions, Kate Smith, said the government is “determined to solve the problem of small pots.
“The government has confirmed that it will be progressing with an authorised default consolidator model to hoover these up. This was followed up by an Autumn Statement call for evidence on a ‘pot for life’ model."
Initially this was designed to give engaged employees the right to ask their employers to pay their pension contributions into a scheme of their choice, then later, to introduce a default model using the principles of both inertia and choice.
She added: “This has the potential to disrupt the current employer-centered pension system, and while it may appeal to those who prefer to manage their own retirement savings, it risks diminishing employer engagement and support in workplace pension schemes.
"This potential impact warrants careful consideration alongside other pension policy priorities.”
However, some government initiatives faltered in 2023, one of these being the pensions dashboard.
Webb said: “The pensions dashboard programme was ‘re-set’ when proposed deadlines for pension schemes to connect to the dashboard were seen to be unrealistic.
"The revised timetable envisages a go-live to the public no later than October 2026, but much will need to be done even to reach that date.”
Aegon’s Smith said work will still being going on behind the scenes to get up to speed with this programme.
She said: “In June we heard the final connection date for all schemes would be 31 October 2026, and that scheme’s individual connection dates will be set out in guidance and not legislation.
"These dates have still not been published, but a lot of work has been going on behind the scenes at the Pension Dashboard Programme.
“Maintaining momentum and providing clarity and certainty will be important as we enter 2024 – hopefully the year schemes start connecting to the pension dashboard ecosystem – a year later than previously expected.”
amy.austin@ft.com
