DWP proposal could hand millions £930 extra in their pension Government has introduced a new plan to create a pension pots consolidator, which will take workers' pensions and combine them into one by 2030. Government has introduced a new plan to create a pension pots consolidator, which will take workers' pensions and combine them into one by 2030. The Department for Work and Pensions could hand millions £930 pension boost with a new plan. The Labour Party Government has introduced a new plan to create a pension pots consolidator, which will take workers' pensions and combine them into one by 2030. The DWP has confirmed it will create a small pots consolidator, due to be in force by 2030, which will automatically merge deferred AE pensions of less than £1000. ‌ The consolidation model will be known as the small pots data platform. It is estimated that there are now 13m small pots of this size, with the number increasing by around one million a year. Jon Greer, head of retirement policy at Quilter explained that the average person holds 2.4 pension pots. ‌ READ MORE Exactly how hot each day this week will be as 29C mini-heatwave sizzles UK He said: "If we take someone with three pots of £1k where charges are applied at 0.75% - the upper end of workplace pension charges - and assume they consolidate £3k into a scheme charging 0.25%, over 30 years the pot would be worth £930 more, so £6,640 versus £5,710)." The Pensions and Lifetime Savings Association director of policy and advocacy Zoe Alexander says: “The accumulation of small pots creates unnecessary cost and complexity for savers and schemes alike. The PLSA has worked extensively with industry and the DWP to propose solutions and supports the model being proposed by the Government. Article continues below “We look forward to working on delivering the recommendations of the Small Pots Development Group and are pleased the Government is tackling this long-standing issue in the Pension Schemes Bill. Standard Life managing director Gail Izat adds: “The number of small pots in the system is growing at a rate of knots and ultimately heightens the risk that people will lose track of their hard-earned savings." Aegon head of pensions Kate Smith adds: “The Pension Schemes Bill will include a package of reforms, including a new duty on schemes to enable the automated consolidation of small, deferred pension pots, valued at £1,000 or less, into authorised default consolidators. ‌ “This Small Pots Delivery Report sets out recommendations on how best to implement the model. It’s clear that there’s still a lot of work to be done to determine the authorisation and supervisory framework, design, delivery and implementation of the small pots regime. “The government intends to build on the master trust authorisation regime to enable master trusts to apply to become default consolidators. It’s expected the FCA will develop a regulatory framework for GPP providers. “One key element is a feasibility review of the Small Pots Data Platform digital infrastructure, which will be led by the PLSA. Previously described as the ‘clearing house’, this is a critical component of the proposed small pots regime, as it will be responsible for data matching and verification, and identifying or allocating a default consolidator. Article continues below “The new duty on schemes to transfer small, deferred pots to authorised consolidators is due to be effective from 2030 and it’s likely this will then be phased in over a few years. “ We believe this is a reasonable timeframe given the other reforms the Government intends to deliver including pension dashboards, the value for money framework, and its pension scale objectives. These will lead to scheme-level consolidation as well as having an impact on future authorised default consolidators, so need to be delivered first.”