Michelle Cracknell: Should employers encourage the consolidation of small pension pots?

No, we do not think employers should be encouraging their employees to consolidate small pension pots.


Pensions are long-term savings products. They have a long tail, which means employees could be sitting with old pension pots that have some useful or valuable features.

Making a general comment, even if it is related only to recent pension schemes, could lead people to assume that it applies to all their pensions.

Pension decisions are complicated and do not lend themselves to general comments, such as ’consolidating your small pension pots may be in your best interest’.

An employer is not necessarily aware of the employee’s circumstances, yet any comments made to an employee could be read as applying to them.

The pension reforms that are taking place need the individual employee to take ownership of their own retirement income position. The message of an employer giving advice, which is how it will be perceived, is conflicting.

Employers can play an important role in nudging their employees to think about their retirement position. Helpful comments such as ”we know where you are, but does your old employer?” reminds employees not to lose track of their previous pensions.

Employees do need access to guidance and we support the government initiative to ensure that everyone has access to such a service. We are currently providing this service.

As an independent and impartial organisation, we would encourage employers to refer their employees to us for personalised guidance on their small pension pots.

Michelle Cracknell is chief executive of The Pensions Advisory Service