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Paying fees on multiple pots might mean your retirement savings are missing out
Ruth Jackson-KirbyMoney writerMonday 01 December 2025 13:32 GMTComments
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How many pensions have you got? A generation ago, people would typically reach retirement with two or three pots. Today, many rack up that number before they hit 30.
Job changes, fluctuating earnings and auto-enrolment mean more of us are saving for retirement, but we’re doing it across a growing number of small, scattered accounts.
“The days of people being wed to one or two employers over their working life are long gone,” says Clare Moffat, pensions and tax expert at Royal London. “For younger people today, it’s not unrealistic to think they might build a dozen pots over their lifetime.”
New figures underline how common this fragmentation has become. Data obtained by InvestEngine shows Nest, the UK’s largest workplace pension scheme, holds 13.7m accounts but only 3.88m are currently receiving contributions. The rest are dormant.
That doesn’t mean millions have stopped saving for retirement.
But it reflects a big problem with auto-enrolment – the policy introduced in 2012 that means employees are automatically opted into a workplace pension scheme.
How does auto-enrolment work?
Every time someone starts a new job with a new workplace pension provider, a fresh pot is created. If your earnings dip below the £10,000 threshold for auto enrolment eligibility, contributions pause, and another small pot is left behind.
Lower and mid-income workers, who move in and out of eligible roles more often, see this the most.
open image in gallerySaving for retirement isn't top of everyone's to-do list (Getty/iStock)“Our average member has a salary of £24,000 per year. We also see many of our members working seasonal, contract or shift work,” says Sarah-Rose Burke from Nest. “Given the demographic of Nest members, we often see changes throughout the year as our members cycle in and out of employment and eligibility for auto enrolment or change jobs.”
The problem is clear in the figures from Nest.
The average Nest pot sits at £3,218 for women and £4,924 for men. That doesn’t mean these people are failing to save enough for retirement but each pot may only represent a small slice of their pension savings. One person might have five or six small accounts across different pension providers before they reach their forties.
Nest does offer a ‘pot for life’ to members whose past and current employers all use the scheme, but there are over 300 automatic enrolment schemes, so most people still end up with multiple accounts.
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What’s the problem with multiple pension pots?
“Thirteen years after the introduction of automatic enrolment in October 2012, the proliferation of multiple small pension pots should serve as a wake-up call,” says George Bonello, head of pensions at InvestEngine.
“While auto-enrolment is rightly celebrated for bringing millions into pension saving, it has indirectly caused greater fragmentation. This results in lower visibility and control, and greater administrative difficulty in planning for retirement.”
Small pots are an issue because they can cost more to run, with multiple fees and charges, while some may be invested better than others - plus they are easy to lose track of.
It’s much harder to understand your overall retirement position when your savings are scattered across several accounts.
open image in galleryAround 3.3 million grandparents stepped up to offer free childcare too (iStock)There is some progress to reform the situation. The Pension Schemes Bill aims to introduce automatic consolidation of small pension pots.
In the meantime, there are practical steps you can take to make it easier to see how much you have saved for retirement.
What steps should you take?
Start by finding all your different pension accounts. Your current employer can tell you which workplace pension provider they use, and the government’s Pension Tracing Service can help you track down any pots you have forgotten about.
Once you have the full picture, consider whether consolidating your pots makes sense.
Check charges and any guarantees attached to your pots before you move anything. You can get free pension advice at PensionWise either online or by calling 0800 011 3797.
If your earnings regularly fall below the auto-enrolment threshold, setting up a personal pension can help you make steady contributions without relying on your eligibility at work. It’s also important not to let gaps in paying into your pension stretch on for years.
“If you do find that you need to opt out of your pension scheme due to financial pressure, then it’s important to keep a note to check back regularly so you can get re-enrolled when things get better,” says Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.
“This will be done automatically every three years but ideally you don’t want to spend that much time out of the market if you don’t need to.”
The growth of small pots is an unavoidable side effect of an effective auto-enrolment system that clashes with the flexible way many of us work. Getting a clear view of what you’ve saved – and bringing scattered accounts together where it makes sense – can make your retirement planning far less of a guessing game.
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