Almost two thirds (62 per cent) of UK workers with a defined contribution (DC) pension have more than one pension pot, research from Wealth at Work has shown.

The financial wellbeing company warned that the proliferation of multiple pots was creating new challenges around visibility and engagement.

Five per cent of employees said they were unsure of how many pensions they had, which Wealth at Work said showed how fragmentation can reduce oversight of retirement savings.

Its research highlighted a connection between visibility and engagement, as 27 per cent of workers said they would be more likely to engage more regularly if they had a single combined view of the value of all their pensions.

The introduction of pensions dashboards will aim to enable savers to see all their pension pots in one place, and while Wealth at Work acknowledged this as an important step forward, it noted that people may still want to take action to consolidate their pots.

It found activity had already begun in this area, with 24 per cent of employees having consolidated their pensions, while a further 32 per cent were considering or planning to bring their pots together.

“Having multiple pension pots is now the norm, but this can make it much harder for individuals to see the bigger picture,” commented Wealth at Work director, Jonathan Watts-Lay.

“Without a clear view of their total pension savings, it becomes more difficult for people to plan effectively or make informed decisions."

Watts-Lay argued that the findings highlighted the important role of financial education in the workplace, alongside solutions such as pension consolidation, in helping improve visibility, engagement and overall understanding of retirement savings.

“As individuals approach retirement, access to personal retirement guidance also becomes increasingly important in helping them understand their options and make informed choices,” he continued.

“Improving engagement can be hugely beneficial for employees in supporting better financial wellbeing, reducing financial stress and helping people to feel more confident about their future.

“This in turn have a positive impact on business productivity and help employers better plan for retirement across their workforce.”

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