Last updated: 14 October 2026
What happened to the “one pension pot for life” proposal?
The “pot for life” idea, put forward by the previous government in November 2023, would have let workers choose one pension provider and have every employer pay into it. It was a consultation proposal and was never introduced. The current government has focused instead on consolidating small deferred pots, larger default funds and value-for-money tests for workplace schemes. Under today’s rules, your employer still chooses the workplace pension it auto-enrols you into, and you may build up several pots over a career.
Pot for life vs today’s system
| Feature | Pot for life (proposed) | Current rules |
| Who chooses the provider | The worker | The employer, for auto-enrolment |
| Number of pots | One | Often one per job |
| Small old pots | Would stay in your one pot | Small deferred pots to be consolidated automatically under new rules |
| Status | Not taken forward | Law, with consolidation measures being phased in |
Managing several pension pots
- Track them down: use the government’s free Pension Tracing Service to find old pensions.
- Compare charges: high fees on old pots can eat into growth.
- Check for guarantees: some older pensions have guaranteed annuity rates or protected tax-free cash worth keeping.
- Transfer carefully: consider consolidating into a low-cost personal pension, but take advice for any defined benefit pension worth over £30,000, which legally requires regulated advice.
Tax isn’t affected by the number of pots
Your annual allowance of £60,000 and the £268,275 lump sum allowance apply across all your pensions combined, not to each pot. Having several pots doesn’t give you extra allowances.
Example
Asha has worked for 5 employers and has 5 workplace pots worth £4,000, £9,000, £12,000, £22,000 and £45,000. Three of them charge 1% a year. She moves the smaller ones into her current employer’s scheme, which charges 0.3%. On £25,000, the saving of 0.7% a year is £175 a year, which can make a noticeable difference over 20 years.
Employers’ pension choices
For business owners, auto-enrolment duties still apply. You must put eligible staff into a qualifying scheme with at least 8% of qualifying earnings, of which at least 3% comes from the employer. You can let staff join a scheme of their choice, but you must still provide a qualifying workplace scheme.
Keep track of your State Pension too
Check your State Pension forecast online alongside your private pots. Gaps in your National Insurance record can sometimes be filled with voluntary Class 3 contributions, which can be good value. Knowing your full picture helps you decide how much to save and when you can afford to retire.
Nominate beneficiaries
Each pot has its own expression of wish form for death benefits. With several pots, it’s easy for old nominations to be out of date. Review them after major life events.
Frequently asked questions
Can I ask my employer to pay into my own pension?
They can agree to, but they don’t have to.
Will small pots be merged automatically?
Under new rules, small deferred pots are due to be moved into approved consolidators over the coming years.
Does transferring cost anything?
Some providers charge exit fees; check first.
Can I lose tax-free cash protection?
Yes, some transfers lose protected rights.
Related: a lump sum pension contribution before retirement, 25% tax-free cash after withdrawals and pension contributions to cut higher-rate tax.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with pension planning. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
