More than a quarter of adults (26%) have at least one pension pot of less than £5,000, while 15% do not know if they have one or not, a new Aegon study has found.

The research also looked at whether people have combined multiple small pension pots into one and found that 58% of adults have never consolidated a pension.

Auto-enrolment and the fluidity of the job market has led to an increase in the number of small pension pots, with workplace pensions not normally following someone when they move jobs. Aegon stated that people are likely to accumulate several different pensions over the course of their working life, with estimates from the DWP suggesting people will move jobs an average 10 times throughout their working life.

Aegon’s findings, based on a study of 727 adults, suggested that one in four (39%) had moved some or all their pensions together, while one in six (58%) said they have never consolidated a pension pot. The study also found that 2% didn’t know if they had.

“Having multiple pensions can make it difficult for people to keep track of their savings and provides challenges when understanding the full value of their retirement savings,” commented Aegon head of pensions, Kate Smith.

“Bringing these pots together is the simplest way to keep track of pension savings, but Aegon’s research shows well over half of adults have never done this. This isn’t surprising given the low level of pension engagement and understanding in this area.

“Other benefits of consolidating small pension pots include the potential to receive lower charges and access to helpful retirement planning tools which many modern schemes now provide.”

For those who haven’t consolidated a pension pot, Aegon suggested that 36% would be interested in bringing their pots together. One of the ways currently being explored by the government to facilitate this is enabling an automated solution for low-cost transfers and consolidation for the auto-enrolment mass market.

Aegon’s research found that a third (34%) of adults would likely use an automated consolidation solution to for a pension pot under £5,000.

“The government’s small pot working group is looking into solutions to address the issues associated with the rise in small pension pots,” Smith added. “This includes how to implement some form of automated consolidation which Aegon’s research shows is well supported.

“The inertia principle of auto-enrolment has been very successful in helping increase pension savings and this principle could be harnessed in automated solution to help tackle the small pot issue as well. Together with the pension dashboards programme, these solutions should offer savers a much clearer picture of their retirement savings and could be a major step towards improving pension engagement.”

Share Story: