Average Millennial could have five different pensions

Millennials could already have five different pension pots, with workers aged 18-34 having had an average of five employers each, new research from AJ Bell has revealed.

The research reported that the collection of multiple pensions was due to the frequency with which workers aged 18-34 changed jobs, with the average 26-year-old Millennial changing jobs typically every 12 months if they left university at 21, potentially building up a new pension pot each time.

AJ Bell also found that only 15 per cent of people said they had consolidated their pension pots.

The study comes following the announcement that the number of ‘deferred’ pension pots in the UK is expected to surge from around eight million in 2020 to 27 million in 2035.

AJ Bell compared this with those savers aged 55 and over who have worked two decades longer, yet are only reported to have had six employers on average.

AJ Bell head of retirement policy, Tom Selby, commented: “While Baby Boomers born post-World War II might have had only one or two employers in their career – potentially offering generous guaranteed defined benefit pensions – the younger workforce is increasingly transient.

“In fact, the average Millennial – who might be less than halfway through their career - is likely to have changed employer five times already.

“With further job changes inevitable over the coming decades as careers progress, the average number of jobs younger people have throughout their working lives is set to hit double figures.

“Given automatic enrolment requires employers to offer a workplace pension to all eligible employees, it is increasingly likely people will have retirement pots scattered across various providers.

“Pensions dashboards should eventually make life easier by allowing savers to view all their pensions in one place, online. However, it will still be up to individuals to take the bull by the horns and combine their pensions with a single provider.”

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