What is the purpose of the Feasibility Review?
The Review was commissioned to assess whether the Small Pots Data Platform (SPDP) can be delivered to support the Government’s multiple default consolidator (MDC) model. Its goal was to determine the most practical, cost-effective, and scalable digital solution to consolidate millions of deferred small pots by 2030.
Who produced this report?
The Feasibility Review was commissioned by Pensions UK (formerly the PLSA), at the request of the Department for Work and Pensions (DWP). Pensions UK appointed Lumera and KGC Associates as the Expert Reviewers responsible for conducting the analysis and drafting the review.
Who supported this work?
The Review was supported by a consortium of schemes alongside the DWP. Contributions also came from the Association of British Insurers (ABI), the Pensions Policy Institute (PPI) and regulators such as The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), and input was gathered from service providers and international experts.
How was the report written?
The Expert Reviewers engaged widely with the pensions industry, supported by oversight from a Governance Panel appointed by Pensions UK. They consulted DWP, regulators, trust, hybrid and contract-based schemes, and technology providers. Two industry workshops were run with operational representatives from industry to explore the initial findings of the review. International perspectives were also considered to inform governance and delivery models.
Why is the SPDP needed?
Deferred small pots have proliferated due to auto-enrolment, leading to fragmentation, lost pensions, and poor value for savers. The SPDP aims to:
- Reduce lost pensions
- Simplify consolidation
- Improve engagement with retirement savings
- Ensure value for money for members, schemes, and taxpayers
What delivery models were considered?
The Review compared:
- Centralised models: A ‘Clearing House’ that maintains central records and processes all consolidations.
- Federated models: A decentralised, industry-delivered system where schemes and consolidators exchange data directly using agreed standards.
- Hybrid/technology shield models: Central services that provide shared functions without holding personal data.
Which delivery model is recommended?
The Review recommends a federated, industry-led model. It:
- Uses existing open standards (ISO 20022, SWIFT)
- Builds on experience from the pensions dashboards programme
- Avoids the complexity, cost, and delays of centralised builds
- Can be delivered within the 2030 Roadmap timeline
Why not a centralised approach?
Centralised builds:
- Require huge upfront investment and lengthy procurement
- Involve sensitive data storage, raising GDPR and liability concerns
- Lack industry appetite
- Risk delivery delays and cost overruns
- The Review found no practical or political appetite to pursue this route.
How will matching of pension pots work?
Matching is critical to ensure accuracy:
- Match Made: Strong, verified matches with very low tolerance for error
- Possible Match: Limited, carefully defined fuzzy matches (e.g., minor discrepancies in names or dates)
- Matching criteria will need to be prescribed and governed
What is the 'carousel' approach?
If no match is found, the carousel mechanism allocates a pot fairly among approved consolidators.
- Could be randomised or weighted
- Ensures equitable distribution across consolidators
- Requires monitoring and reporting by regulators
What are the estimated costs?
For a federated model:
- Ongoing annual costs: £7–13m (schemes and consolidators combined)
- One-off SWIFT message fees for stock of pots: £8m
- Flow processing costs: £0.3m p.a.
These costs are significantly lower than centralised alternatives.
How will governance work?
Strong governance is essential. The Review proposes:
- A regulatory-led governance entity
- Mandated or endorsed technical and data standards
- Oversight by TPR (trust-based schemes) and FCA (GPPs)
- Involvement of industry bodies
What are the next steps?
Next steps include:
- Government to review the findings of the review
- A stage two Review to address unresolved policy and operational issues
- Early engagement of industry through a delivery entity
- Development of prescribed standards for matching, messaging, and carousel operation
- Secondary legislation to clarify details such as liability, exceptions, and phasing
- Implementation planning in line with the DWP’s 2030 Roadmap