Millions of low-paid workers should get refunds worth up to £100 from workplace pension “micropots”

London, 16 June 2026 Smart Pension, one of Britain’s largest workplace pension providers, said that refunding money saved into pension pots by low-paid workers in short-term jobs would help boost the household savings and financial resilience of millions of workers.

The policy of automatically enrolling workers into workplace pension schemes, in place since 2012, has led to the creation of more than 15 million “small pots”, under £1000 and as many as 5 million of those pots are “micropots”, holding less than £100, according to industry reports.  

“Micropots” typically arise when a worker starts a job and joins the pension scheme, but then leaves soon afterwards. More are created every day.  

Smart said that the money in pots under £100 should be returned to workers to save and spend now, rather than being locked up in pensions until their late 50s.

Jamie Fiveash, CEO of Smart UK, will make the proposal in a speech to industry at the Professional Pensions conference this week. The plan has already been privately discussed with Government ministers and officials.

Charities estimate that more than 11 million adults in Britain have less than £100 in savings.

Smart Pension said allowing the refund of “micropot” pension savings worth less than £100 would deliver cash payments to low-income households, allowing them to build financial resilience.  

The money could also help with the cost of living. This could be unlocked quickly, potentially in the current Parliament, Smart said.

Jamie Fiveash, CEO of Smart UK, said:

“This is a great opportunity to improve the financial situation of those on the lowest-incomes in the UK. We know many millions of people across the country are struggling day-to-day, and have less than £100 saved for a rainy day. Allowing the refund of dormant micropots would give these households immediate access to modest sums that could help build short-term savings buffers, ease financial stress, and help prepare for any unexpected outgoings.”

“This is not a retreat from pension saving. Pots of this size, even in multiples, over a lifetime, do not make for a successful retirement outcome.”

“Many of these micropots were created in the very early days of auto enrolment, when contribution rates were incredibly low, or they were created because workers missed a chance to opt-out before their pension contributions started. Because these pots are heavily loss making to administer, they are effectively being subsidised by other larger, pension pots.”

“Moving these micropots out of the pension system will allow it to operate more efficiently. It will help reduce transfer volumes before we have any meaningful solution to the vast number of small pots, over £100 and under £1,000, created by auto enrolment.”

“A campaign like this could also serve as a great opportunity to create engagement around the launch of the Pensions Dashboard. If we can do all this whilst easing the hardship of some of those on the lowest incomes, it seems like a win-win for everyone.”

Smart Pension is Britain’s fastest-growing master trust, serving 2 million members and 100,000 employers.  Launched in 2014, the company recently announced that it passed £10 billion in assets under management.

The £10 billion threshold is a key milestone for the Government’s pension “megafund” plan, which requires providers to have large-scale investment portfolios in order to be eligible to operate under the auto enrolment rules.

About Smart Pension

Launched in 2015, Smart Pension now exceeds £10bn in Assets Under Management (AUM) and serves 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.