New measures to protect small pension pots from being eroded by
charges were laid in Parliament today (Monday 10th January 2022).
The rules, which come into force from April 2022, mean pension
savings invested in the default funds of schemes used for
Automatic Enrolment with a value of £100 or less will be exempt
from flat fees, benefitting hundreds of thousands of savers
across the country.
Minister for Pensions said:
Automatic enrolment has truly revolutionised pension saving in
the UK. More than 10 million people have been enrolled into a
workplace pension, with an additional £28.4 billion per year
being saved since 2012.
By removing flat fees on pension savings worth less than £100,
we’re protecting savers, particularly those who regularly take on
short-term work or change jobs frequently, and helping them build
for their financial futures.
2022 marks ten years since the introduction of Automatic
Enrolment. Since its introduction, the percentage of eligible
employees participating in workplace pensions as a whole has
grown from 55% to 88% – an increase of 33%.
By November 2021, a record 10.6m eligible employees were enrolled
in an Automatic Enrolment pension scheme.
Alongside the £100 threshold – known as the ‘de minimis’ – the
government continues to engage with the pensions industry on
wider consolidation initiatives to tackle the growth of small
pots, including through the industry-led Small Pots Co-ordination
Group.
