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, but the old provider will still take charges and fees from it, which can cause the value to go down. 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, you’ll need to think about things like who you’ve worked for in the past and who your pension providers were. You can then use the government’s Pension Tracing Service, which gives you contact details to help you track down lost pots. You can check MoneyHelper for more information.

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 positive difference to the amount of money you have in retirement. 

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

Let’s look at a few things you could consider. Keep in mind 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 combining them into a single pension plan through something called a pension transfer. That could be with us or a different provider. 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. 

But transferring isn’t right for everyone and 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.

You can find out more about transferring plans in our guide. 

Think about taking them

Thinking about taking money out of your small pots? You can do this, as long as you’re aged 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 a single lump sum under ‘small pot rules’. This option is attractive to some people because you can take up to three small pots in this way without triggering something called the ‘money purchase annual allowance’ (MPAA). Triggering the MPAA can have tax implications; you can find out more about how it works on MoneyHelper. 

75% of your pot usually taxable, so be aware that taking it 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 do have more than one small pot, you don’t need to take them all at the same time. For example, you might take one small pot, then wait until the next tax year to take another pot.

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 MoneyHelper to find out more about getting financial advice.  

You don’t need to take money from your small pots if you’re not ready – for example, if you’re still working or don’t feel you need the money just yet.

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. But the proposed solution only relates to pots worth £1,000 or less, and it hasn’t come into play yet. There are things you can do now, though.

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 the benefits pension plans have to offer.  

You can usually check how your plan is doing and update your details through your provider’s app or online services, or by getting in touch with them. You can find out more about Standard Life’s online services on our website, or visit our support page for FAQs and ways to get in touch. 

 

The information here is based on our understanding in November 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.