Furthermore, the pensions market is consolidating.
Master trust authorisation has more than halved the number of master trust schemes and we expect consolidation in the single employer trust space to continue.
The Department for Work and Pensions could help handle the small pot problem by further forcing the pace of consolidation, following their consultation paper on the issue earlier this year.
But neither of these things is the answer to the problem.
Soon the pensions sector will need to come together to hammer out a solution to the small pots issue and prevent the problem developing further.
Gregg McClymont is policy director at The People’s Pension