Pension assets are usually built up over a person’s working life and due to recent legislation, it’s likely that employees across the UK will have multiple pots. The government launched auto-enrolment rules in 2012 which forces employers to create and contribute to pension schemes for all eligible staff.
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These changes have been largely welcomed but they have an unfortunate side effect.
Pension details can be easily lost or forgotten and this can be especially true for pensions built up from a job held many decades ago.
Efforts have been made to rectify this issue, with an example being the states pension tracking tools.
However, a new supportive measure may be introduced in the coming months which could drastically alter the pension market.
On July 15, a “Pension Schemes Bill” completed passage through the House of Lords and will soon be introduced into the House of Commons.
The bill is primarily focused on how pensions will be managed and invested, with aims to shift these assets into more environmentally friendly positions.
However, the bill also detailed that a new pension “dashboard” will be introduced which should help savers keep track of all their pension arrangements.
On top of this, the government detailed that it should also protect people from would-be scammers.
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As the announcement detailed: “Through the introduction of pension dashboards and steps to protect savers from scams by tightening the rules and guidance required around transfers, the Bill will advance the government’s goal of ensuring that savers are provided with the necessary support and information they need to make informed choices about their financial futures.”
The new legislation caught the attention of experts within the field and Penny Cogher, a Pensions Partner at Irwin Mitchell, commended the state’s efforts while also providing some insight into how the dashboard will work in practice: “The Bill does include the long-awaited rules around the setting up of the pension dashboard.
“This is an excellent way to help consumers understand and increase their knowledge of their pension savings – it’s a project to enable people to see all their separate pension pots together – online.
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“The Government estimates that on average people change jobs 11 times throughout their career. “The dashboard will show all those different pension pots in one place.
“They can then make more educated decisions about their pension savings- whether to save more, when to retire, how much they should save – these will all lead to better pension outcomes for individuals.
“The actual dashboard project itself is a cross pension industry project and won’t be up and running for some time yet and, in a recent amendment made by the Lords, the Government must report back to Parliament on the dashboard’s operation and effectiveness before it is authorised by the FCA for use.”
Until the dashboard is up and running people can use the government’s current pension tracking service.
This service comes in the form of an online tool which will initially ask the user if they’re looking for a workplace or personal pension.
Once the user has made their selection, they’ll be able to search for their pension using an employer’s name or scheme name.
The final screen will present a list of companies and pension schemes associated with the search term and the user will be given contact details for them so they can hunt down their assets.
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