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ARTICLE · 06 OCTOBER 2026

Small Pension Pots – The Proposed Multiple Default Consolidator Solution

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The UK Government has launched a consultation on consolidating small pension pots worth £1,000 or less through a multiple default consolidator model, aiming to address the growing issue of 13 million deferred small pots across the workplace pensions market. Under the proposed framework, eligible dormant pots would be automatically transferred to authorised consolidator schemes unless members opt out, with implementation targeted for 2030 through a phased regulatory approach.

United KingdomEmployment and HR
Rachael Skuse
Rachael Skuse

As anticipated in the updated pensions roadmap, the DWP has now published the latest consultation under the Pension Schemes Act 2026 (PSA26) reforms. This policy consultation sets out the Government’s proposed approach to addressing the growing number of small defined contribution (DC) pension pots accumulated by members across multiple pension arrangements. This aims to reduce fragmentation, improve efficiency, and support a better functioning pensions market.

This is a far-reaching area of reform which will have a wide-ranging impact on pension arrangements. We consider the ‘pathway for consolidation’ proposals and explain how the multiple default consolidator model is intended to operate. 

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