Master trusts establish Pathfinder group to explore better pension transfers for savers

• Pathfinder brings master trusts together to explore practical ways to modernise pension transfers for savers
• Small pension pots set to increase to 17.5 million by 2030, while transfer volumes are expected to more than double, increasing pressure on transfer infrastructure
• Initiative follows the successful completion of the first inter-master trust transfer using open standards in April
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2 June 2026, London. A master trust-led steering group, Pathfinder, has been established to explore practical ways to improve pension transfers for savers and support a more scalable transfer process across the workplace pensions market.

Pathfinder brings together eight master trusts, representing over £162.7bn in funds under management and 14.5 million savers, and includes People’s Pension, Smart Pension, Nest, and Now Pension.

The aim of the group is to examine how pension transfer infrastructure could be modernised, including the use of open, interoperable standards. The group provides a forum for master trusts to review practical transfer activity, share operational learnings and consider what may be needed to support smoother, more efficient transfer journeys across the sector.

In this context, open, interoperable standards means a common set of data and messaging rules that enable different master trust, administrators and technology partners to exchange transfer information in a consistent and secure way.

The establishment of Pathfinder follows the successful completion of the UK’s first inter-master trust transfer using open standards in April. The transfer used ISO 20022 messages over the SWIFT network, which is already commonly used in other areas of financial services.

One area Pathfinder is exploring is earlier and better pre-transfer validation using open standards. Earlier validation helps identify data discrepancies or reasons for rejection before a transfer progresses too far, reducing drop-out rates by keeping the saver engaged in the process.

Many pension transfers today still involve paper-based, manual processes, creating avoidable friction, increasing operational costs, and poor tracking or audit trails.

The first live transfer demonstrates the potential for fully automated transfers to be processed at materially lower costs than traditional processing, while maintaining secure and auditable exchange between participating organisations.

Pathfinder’s work comes at a time when transfer activity is set to increase sharply due to the arrival of the pension dashboard, the consolidation of over 13 million ‘small pots’ worth £1,000 or less, and ongoing regulatory focus on Value for Money, Consumer Duty, and transfer performance. Pensions UK's Small Pots Feasibility Review estimates that by 2030 there will be over 17.5 million small pots, while the FCA’s recent CP25/39 consultation forecasts consolidation rates to double, driving exponential transfer volumes.

Pathfinder is inviting other UK master trusts to join the group and help shape a practical, evidence-led approach to improving pension transfers for many more retirement savers.

Sue Whittington, Chief Operating Officer at Smart Pension, said:

“Master trusts need transfer processes that match the scale and expectations of today’s market and the significant rise in transfers on the horizon. We’re delighted to be taking this forward, collaboratively, with our industry peers, delivering a solution shaped by the industry itself. Pathfinder has shown that open standards can work through a live transfer, with further transfers already underway. It has also shown that there is a way to improve the transfer process, by better supporting saver engagement with increased transparency and completion rates.”

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‍Angela Staral, Chief Operating Officer for People’s Pension, said:

“This pilot project represents a promising first step in assessing open standards as a way to improve DC pension transfers. As an organisation committed to innovation in pensions, we are pleased to be part of this initiative. It is important to recognise that transferring a pension is fundamentally different from switching bank accounts, as the decisions made can have long-term implications for retirement outcomes. That said, once savers have made an informed choice, the process itself should be as simple and efficient as possible.”

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Gavin Perera-Betts, Chief Customer Officer, Nest, added:

“As part of the Pathfinder group, Nest supports practical solutions that modernise pension transfers and reduce costs across the board. But ease must go hand in hand with protecting savers. Our members’ pension savings are one of their most significant financial assets, so we want to ensure improvements to the transfer process focus not only on improving efficiency but on helping members to make the right choices, as well as protecting them from fraud and unauthorised access.”

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Patrick Luthi, Mercer UK’s Head of DC Product and now:pensions CEO, said:

‍“As an industry we are always looking for ways to improve our members’ experience, and this includes during transfers. We support the work of the group to investigate if open standards could provide better outcomes for members. This is especially important considering the potential increase in transfers under the small pot consolidator because of the recently passed Pensions Schemes Act.”

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Master trusts interested in joining the Pathfinder initiative should contact: Justine Pattullo at [email protected]

About Smart Pension

Launched in 2015, Smart Pension now exceeds £10bn in Assets Under Management (AUM) and serves over 2 million members and 100,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.

Aquiline, Barclays, Chrysalis Investments, DWS Group, Fidelity InternationalStrategic Ventures, J.P. Morgan, Legal & General Investment Management, MUFG and Natixis Investment Managers are all investors in Smart Pension.