Filing financial paperwork sounds like a huge bore but it can help people escape the worries of losing a pension.
Advice firm Profile Pensions surveyed 2,096 UK adults and found 24% of under-55s believe they have lost track of one of their retirement pots.
Those aged between 25-34 are most likely to have lost track of a pension (29%), while a further 10% said they weren’t sure if they had or not.
The firm said that the average missing pension located by Profile Pensions was worth £23,000 ($29,894, €26,974).
It also estimates, that in the UK alone, there could be £37bn in unclaimed pensions.
Dashboard to the rescue
Kate Smith, head of pensions at Aegon, said to International Adviser: “It’s not surprising that there are so many lost pension pots out there, especially among the younger generations who may have forgotten about them or not realised their importance.
“People have diverse careers, often involving multiple jobs with different companies, which means multiple pension pots to manage.
“Our hope for 2020 is that the government turns its attention to getting pension dashboards up and running, which should be a big help to people with lost pots.
“Pension dashboards will show all pensions, in one place online, dramatically reducing the risk of losing track of pensions from previous jobs. We hope that once people get that complete picture, they will check if they are on track for the retirement they aspire to and if not, take action.
“But while we wait for the rollout of the pension dashboards, the Department for Work and Pensions’ (DWP) pension tracing service can already help people find lost or forgotten pensions they have built up many years ago.”
Tracing service
The DWP launched a pension tracing website to help savers track down lost or forgotten retirement pots in May 2016.
At the time, it estimated that around £400m of unclaimed pension savings were waiting to be claimed.
The service can give people contact details for the pension scheme linked to previous employments.
So, if someone told them they worked for a firm decades ago and don’t know what happened to their pension, the DWP would give them contact details for the relevant pension scheme(s).
But, the it does not help someone find a purely personal pension that they took out themselves, that wasn’t connected to any particular job.
Faults
“I regularly hear from people who are having trouble tracking down pensions from previous employments,” Steve Webb, director of policy at Royal London told IA.
“A good place to start is the government’s pension tracing service, which can provide contact details for pension schemes.
“But it can sometimes involve a good deal of detective work to track down historic pensions.
“This is a constant reminder that by far the best strategy is to hold on to all your pension paperwork as it makes tracking down your pensions so much easier.”
Compare the pension
Peter Bradshaw, director at Selectapension, told IA: “Losing track of pension entitlements is easy, finding them is tricky but could be life-changing.
“It’s easier to find them if they were provided by employers as people are more likely to remember an employment rather than a product provider-many of whom have merged or been acquired by others over the years.
“The FCA has looked at the market for non-workplace pension arrangements as covered in their FS19/5 feedback document in July 2019.
“There is a strong case for plan holders to review, and possibly switch, suppliers; to benefit from clearer and more competitive charges, which can make a big difference to their pension pots when they come to retire.”
