DWP confirms major change for all households with £1,000 or less in pension pot

The UK Department for Work and Pensions (DWP) has launched a consultation aimed at solving the “small pots problem” in defined contribution pensions. The department confirmed it wants to roll out consolidation of small pension pots by 2030, targeting pots worth £1,000 or less that have been inactive for at least 12 months. The DWP estimates there are more than 13 million deferred pension pots at or below this value, adding about 1 million each year. Launched on September 15, the consultation proposes a requirement for these pots to be transferred into consolidator schemes, with stakeholders emphasizing governance and operational feasibility.