Two thirds of workers have more than one pension pot

Two-thirds (66 per cent) of workers have more than one pension pot, according to research from Interactive Investor.

The study found that two pension pots was the most common number workers had, with 30 per cent of respondents in this bracket, while 6 per cent did not know how many pots they had.

Interactive Investor also found that 63 per cent of Millennial and Gen Z workers, those aged between 18 and 41, had two or more pension pots.

Around 13 per cent of workers under the age of 40 had four or more pension pots, compared to 16 per cent of workers aged 40 and over.

Interactive Investor said that the similarity between the two age cohorts in the proportion of those with four or more pots suggested the greater mobility of the younger workforce and auto-enrolment was making pensions more complex to manage for Millennial and Gen Z workers.

Overall, 15 per cent of working-age people had four or more pension pots.

The firm said that the research underscored the importance of the development of pensions dashboards.

“Younger workers tend to move more quickly between jobs than the older generation did earlier in their working lives,” commented Interactive Investor head of pensions and savings, Becky O’Connor.

“This change in the way careers are built – from ‘jobs for life’ to jobs for two or three years – occurring at the same time as auto-enrolment, means that as people build up experience and pay rises between different employers, they are also building up an increasingly complex pension history.

“Ten years after auto-enrolment was introduced, we are already seeing the effects, with more than half of 18 to 41-year-olds having more than two pension pots.

“The pensions dashboards are due to launch in 2023 and will enable people to see information about all of their pensions in one place. Although this will be extremely useful, it doesn’t fully mitigate the need to keep all of your pension information for yourself.

“It will still be a good idea to keep documentation from different providers and pensions, as if you wish to make changes to any of your pensions, for example, to the underlying investments, you would still need to contact the providers directly.”