The introduction of automatic enrolment in 2012 has led to more than ten million people being enrolled into a workplace pension, many for the first time. For workers outside the public sector, the pension into which they have been enrolled is overwhelmingly likely to be a Defined Contribution (DC) or ‘pot of money’ arrangement.

Under current rules, every time the worker changes job they will be enrolled into a new DC pension and could therefore end up with a large number of relatively small pension pots. This may lead some to consider whether consolidating their pensions might be a good idea.

It is easy to think of advantages, including moving money out of old, poorly performing funds, but there are also potential disadvantages, including the risk of giving up some of the protected features available in certain old pension policies but not available post transfer.

This paper seeks to give savers a balanced picture of the pros and cons of consolidation.