DWP plots big change to pension rules and it could leave millions £1,000 better off

DWP plots big change to pension rules and it could leave millions £1,000 better off As it stands, workers who join a new company is automatically enrolled into their employer's pension scheme. As it stands, workers who join a new company is automatically enrolled into their employer's pension scheme. A big change to pension rules plotted by the Labour Party government and the Department for Work and Pensions ( DWP ) could boost your pot by £1,000. The change will mean pensions automatically join together. As it stands, workers who join a new company is automatically enrolled into their employer's pension scheme. If you move to a new employer, you are then typically enrolled into their pension scheme. It means your old scheme is left to continue generating returns, but you no longer contribute to it. Under new plans by the government, workers' small pension pots will be automatically consolidated into one bigger scheme that the government determines provide good value for savers. Article continues below READ MORE Drivers urged to follow one unwritten rule that'll save them £9,000 Labour Party Pensions Minister Torsten Bell has proposed to merge around 13million forgotten small pension pots worth £1,000 or less into a handful of larger schemes. The plans are set to be included in the Pension Schemes Bill later this year. Mr Bell said: “There are now more small pension pots in the UK than pensioners – raising costs and hassle for workers trying to track their savings. It also costs the pensions industry hundreds of millions of pounds every year. “We will automatically bring together people’s small pots into one high performing pension, reducing costs as well as hassle for savers. In time this could boost the pension of an average earner by around £1,000 as part of our Plan for Change to put more money in people’s pockets.” Rocio Concha, Which? director of policy and advocacy, said: "Which? called for the consolidation of small pots under £1,000 before the election, so we are delighted that the government is committing to doing this - a move that will provide greater value for savers and support them to keep track of their pensions. Article continues below "Which? looks forward to working with the government to ensure the pensions system is fit for the modern age."