Money Observer’s Prudent Parent on the long-winded process that is the consolidation of pension pots.
My better half has accomplished something most people give up on or forget about after a couple of days or weeks at the start of each year: she has completed a New Year’s resolution. While I vowed, and failed, to cut down on pasta, Ms C set about consolidating pension pots from previous employers into a self-invested personal pension.
This mundane yet important exercise can be carried out at any time, but it has proved to be a tedious process, having taken many months – it was only completed in late September. There were only two other pension pots to track down, but watching from a distance, the whole process appeared both cumbersome and painfully monotonous, a bit like Brexit. Given that the average millennial is expected to work in 12 jobs over their lifetime, things need to become more streamlined.
Thankfully, the launch of the much-delayed pensions dashboard, a technological initiative that will allow people to view all their pensions in one place, should speed up the process when it is fully up and running, although that may not be until 2023.
Perhaps when my two-year-old son enters the workforce, looking up pension information will be as swift and easy a process as online banking. After all, banks are required to switch customers within seven days. I won’t hold my breath though, as pension firms have to wade through a lot of tax-related bureaucracy to complete the process.
Such problems will not be solved until the role of pension minister stops being used in a game of musical chairs; since Iain Duncan Smith stepped down in March 2016 there have been six pension ministers.
It’s worth mentioning that while pension consolidation is generally a valuable (if wearisome) exercise, there are certain circumstances in which you really should think twice about it. Steve Webb explains all here in his Pension Clinic.