Millions of workers could be missing out on retirement savings worth an average of £6,000 (Image: Getty)
Millions of workers could be missing out on thousands of pounds in retirement savings after losing track of old workplace pensions, with experts warning that more than half of those who suspect they have misplaced a pension have never tried to find it. Research from retirement specialist Standard Life found that just 34% of people who have worked for multiple employers know the full details of all their previous pension pots. More than a quarter do not know where some or all of their pensions are held, including 10% who have no idea where any of their previous pots are. The findings come as research from the Pensions Policy Institute estimates that more than three million pension pots have been lost across the UK, with each worth an average of £6,000.
Around 2.5 million of those lost pots are believed to belong to people under the age of 55, as forgotten pensions are not just a problem for people approaching retirement. The research said 55% of workers who have changed jobs and believe they may have lost a pension have never attempted to trace one.
Among those who have not searched, 31% said they intended to look but had not got round to it, while 27% did not know where to start. Another 19% said they did not have the time, and 17% believed finding an old pension was not worth the effort.
Meanwhile, 31% of people who suspected they had lost a pension said they had successfully traced one, while 10% had tried but failed. The research also revealed widespread confusion about how workplace pensions operate when people change jobs.
More than one in five (22%) did not realise that moving between employers could leave them with several separate pension pots, while 15% mistakenly believed their previous pension would automatically merge with their new workplace scheme.
55% of workers who suspect they have lost a pension have never attempted to trace it. (Image: Getty)
More than half (54%) of those who had changed employers had never consolidated their pensions. Almost three in ten (29%) also did not know who their current workplace pension provider was, potentially making it harder to keep track of their savings over time. Emma Furlonger, managing director for workplace pensions at Standard Life, said changing jobs could make it easy for retirement savings to slip off people’s radar. “Changing jobs is a normal part of working life, but it’s easy for pension savings to slip off the radar as people move between employers,” she said.
“Starting a new role means getting to grips with a new routine and benefits, so it’s understandable that pensions built up with previous employers might not be front of mind.”
She added that even smaller pension pots could become valuable over time if they had the opportunity to benefit from investment growth.
“The good news is that losing track of a pension doesn’t mean the money is gone,” Ms Furlonger said. “There are straightforward ways to trace previous pots, and bringing them together could make them easier to manage, although consolidation won’t be right for everyone.”
Workers who have lost track of an old pension can start by checking previous statements and paperwork, which should contain information about the provider, the scheme and the pension’s value.
Those without their documents can contact former employers to find out which workplace pension scheme they were enrolled in and which provider administered it.
The Government’s free Pension Tracing Service can also help people find up to date contact details for pension schemes. Having a National Insurance number and dates of previous employment available may make the process easier.
Ms Furlonger also advised workers to keep their contact details up to date with pension providers and maintain a record of their scheme names and policy numbers, particularly when moving jobs.
Some people may consider consolidating their pensions into one plan to make their savings easier to manage. However, this will not be suitable for everyone, and savers should check whether transferring could mean losing valuable benefits or guarantees before making a decision.
