New research from the Pensions Policy Institute shows there are 2.8m missing pension pots, worth £26.6bn altogether.
Since 2018, the number of lost pots has grown from 1.6m and the total value has grown from £19.4bn.
National Pension Tracing Day, launched by Punter Southall Aspire, encourages Britons to search for their missing pots.
The cost-of-living crisis highlights importance of tracking down lost pensions to help fund retirement.
A group of UK retirement savings businesses is calling on Britons to track down their lost pensions to increase their retirement funds. The National Pension Tracing Day (30 October) campaign is highlighting that some £26.6bn is languishing in unclaimed pension pots in the UK. There are now 2.8 million ‘lost’ pots, with an average size of £9,500. Some individual pots will be large enough to make a substantial difference to people’s retirement income.
If ‘lost’ pots remain unclaimed, people will find it harder to achieve their desired retirement income and they will be more dependent on the state pension and means-tested benefits. People risk losing value from missing pots, as they will not have had the chance to choose better pension products, more appropriate investments, or consolidating pots to take advantage of lower fees.
National Pension Tracing Day, launched by Punter Southall Aspire, is urging Britons to take action on misplaced pensions. The Day itself coincides with the clocks going back, so the campaign encourages people to take advantage of the extra hour to start their search and use the pension tracing tools available. Punter Southall Aspire has created a website with a simple guide to using the service and to see if one or more of the 2.8 million “lost” pots belongs to them.
The frequency of people switching jobs – accelerated by the Covid-19 pandemic – and the growth of auto-enrolment are likely to be the main reason for the growth of lost pensions in recent years. It is not uncommon for people to forget to keep pension information when moving jobs. Although auto-enrolment means more people are saving into a pension, it also means some people are not aware that they have a pension or who manages it for them. The combination of these two factors might result in even more ‘lost’ pots in future.
Another common reason for people losing their pots is not updating their address with their pension providers when moving home.
The cost-of-living crisis has highlighted the issue of missing pensions. Increased monthly expenditure is eroding retirees living standards and is reducing how much those still earning can put away for their retirement. A reclaimed pension will help with retirement planning by increasing funds to live off later in life. Over 55s could re-invest the money from a reclaimed pot, or use it to help reduce or pay off their mortgage or pay bills.
Alan Morahan, Chief Commercial Officer at Punter Southall Aspire, said, “The rising cost of living makes it all the more important that people track down the money they have worked so hard to earn and save.
“The combination of more people switching jobs more often and auto-enrolment becoming more commonplace is likely to result in more lost pensions. That’s why we are working with our industry partners to raise awareness of the issue and encourage consumers to take action.”
Johanna Nelson, Director of Communications at Punter Southall Aspire, said, “When you are moving job or home, your pensions are probably the last thing on your mind, but as these figures show, it is so important to keep track or you risk losing out.”
“We really want to encourage everyone to use the extra hour on Sunday 30th to search for lost pensions. We hope the National Pension Tracing Day campaign will result in many finding their misplaced pots.”
National Pension Tracing Day: Top Tracing Tips
List all the places where you have worked. Old CVs, pay slips, P45s or P60s may help you.
Look through your paperwork and see if you have pension statements for all your old employers. You should also check your contact details are up to date on all your pension statements.
Check if there are any gaps where you don’t have a pension statement for an employer. Use the Government’s Pension Tracing Service to find the contact details of their pension scheme. If you can’t find them, that may be because your old employer was taken over. You can find out if they were by searching on Companies House or the Government’s Charity Register. You may also need to get in touch with your old employer or colleagues to find the provider’s name if your employer used a ‘group personal pension’.
Once you have the contact details of your old employer’s pension scheme, get in touch and see if you have a pension with them. You’ll need your National Insurance number to prove that it’s you contacting them. You should also check that you didn’t transfer out to another pension.
Ask how much your pension is worth and get an up-to-date statement. You should also give the provider your contact details so you can keep in touch and ask if you can register online with them to easily access your pension information.