View more on these topics

DWP to review costs of pension auto-transfer plans


The Government is planning to review two alternative automatic pension transfer systems as it looks to gauge the potential impact and cost of introducing “pot follows member” reforms.

In April, the Department for Work and Pensions set out plans to introduce an automatic transfer system for pension pots worth less than £10,000.

Policymakers are considering two reform options.

The first, a “pot matching” system, would require schemes to upload information relating to members’ pension pots onto a new central IT system which would facilitate auto-transfers.

Under the second approach, a member leaving an employer would be given information relating to their pot in the former employer’s pension scheme, which they would pass onto their new employer on starting work.

Centre for Retirement Reform development director Helen Coulson, who wrote a white paper for the DWP last year setting out how auto-transfers could be facilitated, says: “I have it on good authority from DWP that they will review both the database and ‘pension P45’ in September. 

“DWP wants an idea of the consumer, employer and provider impacts and costs for implementation and ongoing running.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “There are potential issues with automatic transfers, particularly if members are automatically transferred from a good scheme to a bad scheme.”

A DWP spokesman says: “We are continuing to work with the industry and our partners across Government to develop detailed options for the automatic transfer process.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. You can bet your bottom dollar that the DWP will spend another 3 or 4 million of hard earned tax payers money on this review and get absolutely nowhere.

    I’ve always thought this pot follows the member discussion was pointless as we already have a perfectly good pot follows member system its called a “personal pension”

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm