Unclaimed Pension Funds Reach £31 Billion - Strategies for Locating Your Previous Pensions
In the UK, it's not uncommon for individuals to lose track of their pension plans due to job changes, auto-enrolment, and other factors. According to recent statistics, 29% of Brits have no idea how many pension pots they have, with an estimated total of around £13,303 across three lost pension plans.
The Pension Tracing Service, a government resource, has seen a significant increase in calls this year. Between 1 January and 24 May, the service received 31,505 calls, which is on track to surpass last year's record of 63,381.
To avoid losing pension plans in the future, it's essential to keep old paperwork, employer and pension provider names, and policy numbers. Informing your pension provider if you move house is also crucial.
If you've already lost track of a pension, there are steps you can take to find it. Begin by contacting your pension provider for account statements or online access. If you can't remember your pension provider, you can get in touch with your old employer. The government's Pension Tracing Service can also help find pension providers' names and contact details by searching previous employers.
Some pension providers offer a free "pension finder" service, such as Aviva, AJ Bell, Moneyfarm, Standard Life, and PensionBee. However, you may need to be a customer to use the service.
Once you've found your multiple pension plans, you might consider consolidating them into a single pension pot. This can simplify management, increase transparency of fees and performance, and potentially be more cost-effective.
However, there are important considerations to keep in mind when consolidating. Defined Benefit (DB, final salary) pensions provide guaranteed income, and transferring them into Defined Contribution (DC) pots may result in losing guaranteed benefits. Consolidation is generally easier and has less paperwork when merging pots from the same provider. Seeking financial advice before transferring is advised to avoid losing valuable benefits or adversely affecting your retirement goals.
As the problem of lost pension pots continues to grow, the government is working on solutions, including pension dashboards and new 'pot for life' proposals. On National Pension Tracing Day, which falls on 27 October, it's a good time to start taking steps to manage and retrieve your lost pension plans.
With an estimated average size of a lost retirement fund being £9,470, and £13,620 for the 55-75 age group, it's crucial to take action and not let your hard-earned pension savings go unclaimed. For a more detailed guide on combining pension pots, check out our guide to consolidation, which covers what to watch out for and how to do it effectively.
To effectively manage personal-finance matters, it's advisable to maintain old records, including employer and pension provider names, and policy numbers to avoid losing track of pension plans in the future. If you've already lost pension savings, there are steps you can take; contact the pension provider, old employer, or utilize government resources like the Pension Tracing Service. Once found, consolidating multiple pension pots into a single pot can streamline management, but it's essential to consider the potential impact on guaranteed benefits and seek financial advice before transferring.
