Pensions UK, you are doing the work that is needed, bringing together experts to get this done to a timetable.

I have written the blog so you can stop with Zoe Alexander’s news item, or follow with Matthew Williams or read the report from Kim Gubler and Maurice Titley.

Here is a little more detail.

If you are keen to (as Richard Smith will) , there’s a link to the whole report. Well done Pensions UK doing what has needed to be done for a long time and set out a road map to completion of this project.

This should not be about the companies that consolidate, it should be about the people who own the pots and need them organised to meet their lasting needs. Thanks to ,,,

We’ve recently published the ‘Small pots Feasibility Review’, looking at potential methods for consolidating small pots. Here are the main takeaways.

The introduction of automatic enrolment, along with changing career patterns, means many savers have multiple, smaller pension pots, resulting in more complicated retirement planning and higher costs for savers.

The industry, regulators and government are now working to find a solution, including consolidation, that is efficient, fair and beneficial for savers. The Feasibility Review shows that a practical industry-led solution is within reach.

Possible models

• Federated, industry-delivered model – allows schemes and consolidators to connect directly using agreed standards without needing any significant new central infrastructure other than for governance and regulation. It would build on existing dashboard connection models and avoid single points of failure. This is the most viable option, being scalable, cost-effective, and avoiding central control. Could be enhanced later with a central ledger (non-personal data) for regulators.
• Centralised infrastructure model (e.g. clearing house) – would create an entirely new central system to manage pension data and consolidation. However, the Review found no industry appetite for this, and it would be complex and costly. It would also require legislation and years to implement due to data sensitivity and varied stakeholder readiness.
• Replicating/reusing pensions dashboards infrastructure – unsuitable because dashboards are consumer-led and consent-based, while small pot consolidation will require B2B and non-consent-based data exchange. However, lessons from dashboard development (like data matching) are still useful.
• Central data service (federated technology with some central functions) – hybrid idea that doesn’t store personal data but helps identify default consolidators. It is not currently viable due to lack of existing tech, funding challenges, and collaboration hurdles, and would need significant early investment and coordination to be feasible.

Recommendations

• Go with a federated model – use existing tech and standards to let pension schemes and consolidators connect directly. It’s the most practical and cost cost-effective, while also fitting within the Government’s timeline of pension reform.
• Avoid building a central system – it’s expensive, slow to deliver, and unlikely to succeed without strong Government backing and funding.
• Government should lead early – provide clear guidance, set up governance, and help the industry get started without too much red tape.
• Set clear data rules – create and enforce shared standards for how data is matched and exchanged. These can be mandated by Government or developed by industry and approved.
• Create a governance body – regulators should oversee progress, ensure compliance, and help coordinate delivery. Start early and consider using a model that encourages early adopters to innovate.

These are just the main points from the Small pots Feasibility Review. For more details and information, read the document in full. 

Thanks to the indefatigable Kim Gubler and Maurice Titley.