A woman was able to boost her pension by £40,000 after tracking down a lost retirement pot. Vikki, who shared her success with the Money Saving Expert (MSE) team in its latest newsletter, explained how she often uses MSE and its founder, Martin Lewis’s, tips.
According to the money gurus, Vikki emailed Mr Lewis, saying: “Love your website and TikTok and often use your tips. I decided to trace my pensions, and they have come back to say they have found one from the 1990s, which I only paid a very small amount into for around five years, as I recall.”
She added that the pension is going to pay her around £160 per month for the rest of her life if she manages to reach 75. The MSE team said: “We estimate this could be worth nearly £40,000 if she does.”
According to the Pensions Policy Institute (PPI), there are currently an estimated 3.3 million lost pensions in the UK, containing £31.1 billion worth of assets. The value of lost pension pots has increased by 60%, or nearly £12 billion, since 2018.
The average value of a lost pension pot is now £9,470, rising to £13,620 among those aged 55 to 75. This increase in unclaimed pension pots is likely due to a combination of people switching jobs more frequently and the growing prevalence of auto-enrolment, which results in more workplace pension schemes being created as individuals move between employers.
However, there are a few simple ways people can track down a pension pot they may have lost track of. You can use free tracing services, such as Pension Attention or Gretel, within minutes.
The Government also offers the Pension Tracing Service, an online tool that’s easy and simple to use. You’ll need either the name of the employer or the pension provider. The helpline will then be able to provide contact details so you can get in touch.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, highlighted the urgency of tracking down a lost pot sooner rather than later, as the money could have a “major impact” on your retirement planning.
She said even the smallest pensions can grow over time, and the pension you paid into a decade or more ago could well have grown a “decent amount.” For example, a £10,000 pension pot would be worth more than £16,400 after 10 years if it grew at 5% per year.
Ms Morrissey said: “This could play an important role in your retirement income. With 21% of people admitting to having lost track of a pension and a further 18% being unsure if they have, it’s a major issue. The good news is that you can do something about it.”
