New rules will allow eligible small workplace pensions to be automatically consolidated, tackling the growing number of pension pots left behind when people change jobs.
Every time you change jobs, you may start a new workplace pension.
Over a working life, that can leave you with several pension pots spread across different providers — including small pots that can be easy to lose track of.
The Government is introducing a new system designed to automatically consolidate eligible small pension pots.
Here's what we know so far.
The UK has a growing number of small pension pots.
The Government has estimated there are around 13 million small pension pots worth £1,000 or less, with the number increasing as people move between jobs.
One of the main reasons is automatic enrolment. When someone changes jobs, they will often start contributing to their new employer's pension while the pension from their previous job remains where it is.
Over time, this can leave people with multiple small pensions.
The Government has chosen automatic consolidation as its approach to reducing the number of these small, dormant pots.
The new rules are focused on small, dormant workplace pension pots.
Under the Pension Schemes Act 2026 and the Government's current framework, an eligible pot is expected to include one that:
is worth £1,000 or less;
is held in an automatic enrolment pension scheme;
is held in a default arrangement;
has not received contributions for at least 12 months;
meets the other requirements and any exemptions set by the detailed regulations.
Not every pension worth £1,000 or less will necessarily qualify.
The Government still needs to finalise detailed regulations covering eligibility, exemptions and how the transfer process will operate.
Read The Pensions Regulator's Pension Schemes Act 2026 guidance.
The Government plans to use a system of authorised consolidators.
These will be pension schemes authorised to receive eligible small pots from other providers.
If you already have a pension with an authorised consolidator, an eligible small pot could be transferred there.
If you have pensions with more than one authorised consolidator, the proposed approach is to use the one holding your largest pension pot.
Where you don't already have a pension with an authorised consolidator, the system is expected to allocate the small pot to one.
The detailed rules governing authorised consolidators and allocation are still being finalised.
Generally, no.
That's one of the biggest differences between the new system and pension consolidation today.
For qualifying small pots, the process is designed to happen automatically rather than relying on the individual to arrange the transfer.
The framework is expected to include safeguards and an opt-out process, so individuals will retain the ability not to have an eligible pot automatically consolidated.
The final detailed charging and transfer arrangements have not yet been set out in regulations.
The Government's stated aim is to reduce unnecessary administration costs and improve value for money for savers.
However, consolidation does not mean that every saver will automatically pay lower charges. The charges, investment approach and features of the receiving consolidator may differ from those of the existing pension scheme.
The authorised-consolidator framework is intended to include value-for-money requirements, but the detailed rules are still being developed.
Savers should therefore not assume a particular financial saving until the final framework and receiving scheme are known.
No.
The reforms are specifically aimed at eligible small, dormant workplace pension pots.
The initial threshold is £1,000 or less.
So having an old pension from a previous employer doesn't automatically mean it will be transferred.
A pension worth more than £1,000, for example, would not qualify simply because you've stopped paying into it.
There will also be further rules and exemptions determining which pensions can and cannot enter the automatic consolidation system.
Automatic consolidation is intended to deal with a specific category of small, dormant workplace pension pots.
Consolidation is not automatically better in every circumstance.
Different pension schemes can have different charges, investment strategies, protections and benefits. Moving a pension can mean giving up features available under the existing arrangement, while investment performance after a transfer may also be different.
The Government's framework is intended to include safeguards, value-for-money requirements and an opt-out. The detailed regulations will determine how these protections operate for automatic small-pot transfers.
For pension transfers you choose to make yourself under today's rules, it is important to check charges and whether valuable benefits, guarantees or other features could be lost before transferring.
MoneyHelper provides free and impartial guidance on transferring and combining pensions.
It isn't happening yet.
The Pension Schemes Act 2026 provides the legislative framework, but detailed regulations and the systems required to operate automatic transfers are still being developed.
So your small pensions aren't going to start moving automatically straight away.
For now, your existing pensions aren't going to start moving automatically because of these new rules.
If you've had several employers, you may still have pensions sitting with previous workplace pension providers.
You can continue to trace and consolidate pensions under the existing rules.
Before transferring a pension yourself, it's important to check whether you could lose valuable benefits, guarantees or other features and to compare the charges and investment options of the existing and proposed pension.
Read MoneyHelper's guide to transferring or combining pensions.
Pension App can trace pensions from previous jobs and bring eligible pensions together into one place.
The service isn't limited to the £1,000 small-pot threshold being introduced under the Government's automatic consolidation plans.
Not every pension is eligible for transfer through Pension App, and pensions with certain valuable benefits or features may not be suitable for transfer.
Pension App currently charges an initial fee of 0.6% on completed transfers and total annual fees and charges of 0.82% of pension fund value per year.
Charges can change, so you should check the latest Pension App fees before deciding whether to transfer.
The Government is changing the way millions of small workplace pension pots could be dealt with.
Eligible dormant pots worth £1,000 or less could eventually be automatically consolidated into authorised pension schemes.
The aim is to reduce the growing number of small pension pots created as people move between jobs.
But the system isn't operating yet, and further regulations and implementation work are still required before automatic consolidation begins.
This article provides general information and is not financial advice.
The Government's automatic small-pots consolidation framework remains subject to detailed regulations and implementation. Pension transfers and consolidation may not be suitable in every circumstance and can result in different charges, investment outcomes or the loss of valuable benefits or guarantees.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change.