The small pots problem: what you can do with yours

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It’s estimated that there are around 23 million small pension pots in the UK that people are no longer paying into. And without intervention, that number could keep growing. But what is a small pot? And how can you stop this becoming a problem for you?

What is a ‘small pot’?

Simply put, a small pot is a pension plan worth £10,000 or less.

What is the small pots problem?

Auto-enrolment has helped millions of people save for retirement through their job without having to think much about it. The concept is pretty simple: when you start a new job, a workplace pension plan is set up for you and you automatically start paying some of your salary into it (unless you choose to opt out or aren’t eligible). And your employer will pay in some too. So, what’s the problem?

The issue is that some people change jobs fairly frequently – meaning they could change jobs again in a few years’ time and completely forget about the pot of money they built up with their previous employer. That pot becomes dormant and its value can get slowly eaten away by various admin charges or fees from their old pension provider. They start a new job, and the cycle continues. Eventually, they could end up with their pension savings spread out over several ‘small pots’ that they’ve lost track of over time.

How can I check if I have a small pot?

To check if you have a small pot, have a think about employers you’ve worked for in the past and when you’ve worked for them.

Next, you can visit our website, where we explain what you can do with that information, and how you could bring your pots together – although doing this isn’t right for everyone. Learn more today.

It’s worth checking for old pension pots linked with all of your previous jobs, even if you were only there for a short amount of time. It all adds up and could make a difference to the amount you have to retire with.

What can I do with my small pots once I’ve tracked them down?

Here are a couple of things you could think about doing.

We’re specifically talking about small ‘defined contribution’ (or ‘money purchase’) pension pots here. With defined contribution pots, money paid in is invested. The value can go down as well as up and could be worth less than was paid in.

Consider combining them

Once you know where your small pots are, you could consider bringing them together into a single pension plan through something called a pension transfer. Having one place for your pension savings could give you a clearer picture of your future. It could also make it a lot easier to manage and keep track of your money and could cut down on the amount you’re paying in charges.

Keep in mind there’s no guarantee you’ll get more money as a result. And some plans have valuable benefits and guarantees that you can lose by transferring, so do check this first.

If you want to find out more about pension transfers, you can read our guide.

Transfer plans to Standard Life

Think about withdrawing it

Thinking about taking money out of your small pots? You can do this, as long as you’re at least 55 (rising to 57 from 6 April 2028).

You can usually get 25% of your pot tax-free, meaning 75% is typically taxable.

If your pot is worth £10,000 or less, you could consider taking it as one lump sum under ‘small pot rules’. This option is attractive to some people because you can do this up to three times – up to £30,000 total – without triggering something called the ‘money purchase annual allowance’ (MPAA). Triggering the MPAA can have tax implications. We won’t go into detail about it here, but you can find out more about how it works on MoneyHelper. 

Remember, 75% is usually taxable, so do keep in mind taking a pot in one go could potentially push you into a higher tax band. You can check GOV.UK for tax bands and rates. They’re different depending on where you live in the UK.

If you have more than one small pot, you don’t need to take them at the same time. For example, you could take them in different tax years. 

What’s right for you depends on your circumstances – shop around and consider all your options. You can get free impartial guidance from Pension Wise about your options if you’re over 50. You could also consider getting financial advice from a financial adviser. You can visit our website to find out more about getting financial advice. 

You don’t need to take money from your small pots if you’re not ready.

What can I do to stop small pots becoming a problem for me?

The government has proposed a way to tackle the problem of small pots, though the solution hasn’t come into play yet. But there are things you can do now.

Pension plans aren’t normally front of mind for people, and that’s a big reason why many lose track of them. Not everyone would think to tell their pension provider when they move home. If your home address and other details aren’t up to date on all your plans, it’s harder for your providers to contact you with important information.

So put some time aside to get to know your pension plans better. Add ‘update personal details’ to your to-do list, regularly check on your pension investments and get a better understanding of all the benefits your pension plan has to offer. The more you see your pension plan as a key part of your overall finances, just like your bank accounts or savings accounts, the more in touch with it you could be.  

If you have a Standard Life pension, we’ve made it easy to get familiar with your plan. Simply log in online or through your app. We also have lots of useful, educational guides on our website to help you brush up on your pension knowledge. 

 

The information here is based on our understanding in October 2025 and shouldn’t be taken as financial advice.

A pension is an investment. Its value can go down as well as up and could be worth less than was paid in. 

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.