Pensions don’t sound like the easiest of things to lose, but if you’ve changed jobs a lot, or moved house a few times, it’s worth doing a bit of digging to check you haven’t got any retirement savings that you’ve lost track of.
At the moment there are an estimated 2.8 million lost pensions, worth £26.6 billion, according to the Pensions Policy Institute (PPI), with each pot that’s gone AWOL worth a typical £9,500.
As many as one in 20 people are thought to have unwittingly lost a pension and stand to miss out on thousands of pounds of retirement income. But the good news is, that if you think you might have lost a pension, it shouldn’t be too hard to track down.
Ahead of National Pension Tracing Day on 29 October, find out how you might have lost a pension, how to track it down and what to do once you’ve found it.
Why are all these pensions going missing?
Since 2018, the PPI reckons the value of missing pensions has risen by 37%, but the actual number of pots that have become separated from their owners over those last four years is up by a staggering 75%.
The main reason we lose track of our pensions is not telling our pension providers our new address when we move house.
While most of us are pretty on it when it comes to letting our bank or GP know that we’ve moved, research from the Association of British Insurers (ABI) suggests only one in 25 instinctively remember to tell their pension provider.
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And telling your pension provider might not be the quick job it once was. Auto enrolment means all employers now have to offer eligible staff a workplace pension and, with the typical person having as many as 11 different jobs over the course of their working life, that could mean you end up with a whole load of pensions.
Even if you inform your “main”pension provider, would you remember schemes from jobs you were only in for a short while or may have left a decade or more ago?
How to find out if you’ve lost a pension
If you have even the slightest concern that you might have lost a pension, it’s important to take the time to find out.
A good starting point is to write a list of all your former employers, taking care to remember those from the very start of your career as well as those roles you didn’t stay in for long.
Next, you need to go through your paperwork and pension statements to try and connect a pension to each job.
Auto enrolment was phased in gradually from 2012 (from largest to smallest firms) but since 2018 it has been compulsory for all employers to offer access to a workplace scheme. The only reasons you wouldn’t have been in the pension would normally be if you hadn’t met earnings criteria, you were in the job for less than three months, or you opted out.
But don’t presume that if a job pre-dated auto-enrolment, you didn’t pay into a pension. Pensions aren’t the most memorable of things and even if you did regularly pay into a scheme while you were there, you won’t be alone if you’ve forgotten every word about it.
For every scheme that you have paperwork for, make sure that the pension provider has up-to-date contact details for you. If your last pension statement is several years old and you’ve moved in that time, chances are that they don’t.
Updating your contact details with your pension provider is a good opportunity to request an up-to-date pension statement too.
Tracking down lost pensions
If you come across any job that doesn’t have a corresponding pension, it’s time to do a bit more digging.
It might be worth catching up with old colleagues to find out if they can remember anything about the company pension. Or you can contact the HR department – they should be able to fill you in and give you the details of the pension provider or administrator.
Another option is to try the government’s free Pensions Tracing Service. This is an online database of more than 200,000 workplace and personal pensions. All you need to do is input the name of your former employer or pension provider to get the contact details you need.
It’s then down to you to contact the pension provider or administrator to find out if you have pension with them.
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The more information you can provide when you reach out the better – the dates you worked for the business, your address at the time and your National Insurance number will all help.
In some cases you might discover that the provider that runs your pension has changed. However, so long as you know the name of the company that was running it, this handy list on the ABI website, can tell you who has taken it over.
Keeping track of things will get easier once the pension dashboards - which will allow you to access all your pension information online - are launched. The project aims to go live in the second half of 2026.
What to do once you have found a pension
It will no doubt be a relief to be reunited with a lost pension. But that shouldn’t be the end of the process.
In addition to making sure your pension provider has an up-to-date address, you should also establish whether it is a defined benefit pension (DB) or defined contribution (DC) scheme and find out what it is worth.
For DC schemes, ask how much you are paying in charges and check where your money is invested.
Armed with this information, you’ll be in a better position to do decide what to do next.
So long as your pension provider now has your address and you know exactly where your money is, you don’t need to do anything. You can leave your pot where it is until you are ready to draw on it.
But that could be a missed opportunity.
If you have a handful of smaller DC pensions, there could be a strong argument for consolidating them.
Pension charges on older-style plans can be high, especially if you are no longer paying into them. You could be paying as much as 1%, which could take a significant slice off your savings especially over time.
However, by consolidating several smaller pensions into a modern personal pension, such as an online SIPP, you could be able to cut your costs substantially and limit the erosive action of charges on your retirement savings.
It can also make your retirement savings easier to manage – having fewer pension providers to deal with and reducing the chance of losing any of your pots, further down the line.
You would have to decide where to invest your money – SIPPs won’t offer a default fund like workplace pensions – but most providers will offer a lot of guidance to help you pick a low-cost core fund, you don’t necessarily have to build a portfolio of multiple investments.
It’s important, though, that you don’t transfer out of your current workplace pension in the rush to consolidate, as you would then likely miss out on employer contributions.
If you are over 55, you could also cash in a pension you have just found. However, while it might feel like a nice windfall, it would likely trigger a surprise tax bill. Unless you have a desperate need for the money, you will normally be better off leaving it where it is or transferring it into another pension.
And, be wary of any company or adviser that tells you that you can cash in your pension before you are 55, or offers a free pension review – it’s likely to be a scam.
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