56% have more than one pension pot

More than half (56%) of respondents have more than one pension pot, according to research by Now: Pensions.

Its research, which surveyed 2,000 UK adults who have a workplace pension, found that 8% of respondents have four or more pension pots, a figure that rose to 25% for respondents aged over 51.

The research also found that a third (32%) of respondents do not know where all their pension pots are.

In April 2013, pensions minister Steve Webb confirmed the government’s pot-follows-member model, which aims to make it easier for employees to take their workplace pension scheme with them when moving jobs.

Half (50%) of respondents said they would like to consolidate their small pension pots into one and more than a third (39%) would like their pension pot to automatically follow them when they went to a new employer, rather than having to set up a new scheme with their new employer.

The research also found:

  • 81% of respondents would worry if their pension pot was transferred to a scheme that did not perform as well as the old one.
  • 86% of respondents would be concerned if their pension pot was automatically moved into a scheme where the charges were higher.
  • 89% of respondents over the age of 55 would be concerned if their pension pot followed them to a higher charging scheme.

Morten Nilsson (pictured), chief executive officer of Now: Pensions, said: “No matter how long you plan to stay in a job, you should always save in the workplace pension plan.

“When you pay in, your employer pays in, so it’s like getting a pay rise. The sooner you start, the greater chance you have of a comfortable retirement.

Automatic-enrolment will lead to an explosion in the number of small pension pots. In most cases, having one big pot is better than having lots of small ones that can be eaten up by charges.

“But, while there is a lot of logic behind your pension pot following you to your new employer, it’s imperative that safeguards are put in place to prevent people’s hard-earned pension savings being automatically transferred into an unsuitable scheme with high charges.”