New research from the Pensions Policy Institute indicates that savings pots containing £31.1 billion worth of assets have been ‘forgotten’ by around 3.3 million people across the UK. The average size of a lost pension pot is highest among the 55-75 age group, at £13,620 while those aged 75 and over have an average of £6,540 unclaimed.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown has shared seven simple steps people over 55 can take to track these lost pension pots down and help boost their retirement income. She explained: “It’s easy to lose track of a pension – we move jobs and homes and contact details get lost along the way.”
Ms Morrissey continued: “It’s a consequence of auto-enrolment that you get a pension with every job, but the risk is they go astray. It’s not a small problem either – that pension from the job you had ten years ago will have grown and you risk losing out on thousands of pounds that could be used for your retirement income.
“The Government has its Pension Tracing Service in place to help people track down lost pensions. A recent Freedom Of Information (FOI) tabled by Hargreaves Lansdown showed demand is growing, with 31,505 calls made to the service between 1 January and 24 May this year. There have been 276,000 calls made since January 2019 – it’s clearly needed but the reality is it’s barely scratching the surface of the problem.”
She added that the Pensions Dashboard will help when it arrives but “it’s going to be a few years before we see it and we need actions that prevent the pensions going astray in the first place”.
Seven tips for tracking down lost pensions
- Make a list of everywhere you have worked during your career so far and check to see if you have pension paperwork for all of them.
- Talk to any old colleagues to see whether they kept any of the paperwork. If you’re no longer in touch, LinkedIn can be a really useful place to find them.
- If you have lost details of an old pension scheme, contact the Pension Tracing Service on GOV.UK here. It won’t tell you how much is in the pension, but it will help you find contact details.
- You need the name of the company you worked for, the name of the pension scheme, or the name of the pension provider.
- You can call the Pension Tracing Service on 0800 731 0193 – Monday to Friday, 8am to 6pm.
- Whenever you move home, it is worth adding pension providers to the list of people you need to notify so they have up to date contact details for you and you don’t miss out on important communications.
- Once you’ve tracked down your pensions you may wish to consolidate them. This will give you a better idea of what you have and can improve retirement decision making. However, before you do so you should check you aren’t incurring any exit fees or missing out on valuable benefits such as guaranteed annuity rates that could boost your income. It’s also worth saying it rarely make sense to transfer a defined benefit pension.
The retirement expert added: “The Government’s work on small pots will help by bringing them together in a default consolidator model, though this would not deal with the issue of larger pots going walkabout.
“The Lifetime Pension model could help nip the issue in the bud by allowing people to highlight the provider they want their pension contributions paid to throughout their career. Keeping a pot for life will make it far easier to keep track of and boost engagement as members can see their pension grow in one place rather than having a fragmented picture through scattered pensions.”