We run through how savers can track down lost workplace or personal pensions.
Around one in four savers under the age of 55 have lost track of a pension pot from a previous employer, according to new research.
The study was carried out by advice firm Profile Pensions, which polled 2096 adults; it found that almost one in four (24%) savers may have lost track of a pension from a previous employer.
Those aged between 25-34 were deemed most likely to have lost track of a pension, with almost one in three (29%) saying they believed they had lost track of a pension, while a further 10% said they were not sure if they had or not.
Michelle Gribbin, chief investment officer at Profile Pensions, comments: “With auto enrolment and the fact that people are working longer, people have more pensions than ever to keep track of. Whilst we’re extremely proud to have reunited so many people with their forgotten pensions, we believe the government’s pensions dashboard is the ultimate long-term solution to the missing pensions crisis we’re seeing unfold.
“It is extremely important people know where their pensions are, not just so they can access them at retirement, but also because they can make positive changes to their pensions pre-retirement, such as consolidating them into a cheaper, well-invested plan.”
Out of a total of 3,713 pensions reviewed by Profile Pensions between January 2019 and October 2019, the average missing pension that was located by Profile Pensions was worth £23,000. Based on this £23,000 figure and the fact there is an estimated total of 1.6 million pension pots currently missing in the UK Profile Pensions puts the total missing pension pots at £37 billion.
This estimate is higher than a figure of £20 billion that was estimated by previous research (in October 2018) carried out by the Pensions Policy Institute (PPI) on behalf on of the Association of British Insurers. Based on its conclusion that 1.6 million pension pots were going unclaimed, the PPI estimated a total of £19.4 billion was held in missing pots. This is the equivalent of nearly £13,000 per pot.
But, while there’s debate regarding precisely how much is lying unclaimed in mislaid pension pots, it is clearly an enormous number that affects a large cohort of people. Below we run through how to track down a lost pension pot.
What to do if you think you’ve lost a pension pot
After entering the name of your former employee, you should be provided with a contact number for the organisation. If you contact this number you will need to be able to quote them your PAYE number, details from an old payslip or your pension policy number.
However, if your former employer has since gone out of business or been taken over by another company, tracing a lost pot through the tool is not so easy.
In the future, when pension dashboards exist, it should in theory be easier for individuals to keep up with workplace pensions from previous employers. The pension dashboard is a technological initiative that will allow pension savers to see all their pension pots in one place. The launch of the first dashboard, hosted by the Single Financial Guidance Body (SFGB), was scheduled to take place last year, but has not yet got off the ground.
The SFGB is a non-departmental public body, backed by the Department for Work and Pensions. Last year it replaced the Money Advice Service, the Pensions Advisory Service and Pension Wise.
Once you have tracked down all your pension pots, it may make sense to consolidate them in one place, but that’s not always the best option. One thing that it is vitally important to weigh up is the charges involved.