Pension transfers: the case for ‘pot follows member’ continues to unravel

Image: TaxFix.co.uk.

Regular readers [of Touchstone] will be familiar with the TUC’s opposition to ‘pot follows member’, the government’s proposed solution to the likely creation of millions of small pension pots once automatic enrolment is fully rolled out. Nigel Stanley first wrote about this on Touchstone in June, and the TUC joined forces with Age UK and Which? in July to raise concerns that, if pension pots automatically follow a worker from job to job, there is a significant risk of consumer detriment if their new employer’s pension scheme is worse than their old employer’s scheme.

Today brings a crucial developments in the campaign: the publication by DWP (at the request of the TUC) of additional modelling that enables a fairer comparison of pot follows member with our preferred approach, an ‘aggregator’ scheme.

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