SNAPSHOT2 min read

Are you entitled to any of the £26.6 billion held in lost pension pots?

£26.6 billion is waiting in lost pension pots and you could be entitled to some of it. Learn how pension funds get lost and how you can claim any lost pots.

21/03/2023
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The cost of living crisis is putting pressure on people’s finances and many are concerned about how it will affect their retirement savings.

According to The Actuary, 70% of workers believe they will have to defer their retirement, and one in five people stopped or reduced their pension contributions in the 12 months from January 2022.

But even when the cost of living is high, did you know that you may be able to boost your retirement savings by recovering your lost pension pots? That’s because the Pensions Policy Institute (PPI) reports that there is £26.6 billion sitting in forgotten funds, ready to be claimed.

Read on to learn how pension pots get lost to begin with and how to claim any money you are entitled to.

Over 2.8 million pension pots are “lost”

The PPI estimates there are 2.8 million lost pension pots that people could add to their retirement savings. Claiming this money could help you make better decisions about your retirement, which is why the PPI are urging people to check that they know where all their pension funds are.

The Great British Retirement Survey, conducted by interactive investor in 2021, found that 66% of people had multiple pensions, and 15% of those people had four or more. So, you can see how easy it would be to lose track of your retirement savings.

In many cases, pension pots get lost when you start a new job. You may begin paying into a new pension scheme, while your old one is left dormant. If you move home and forget to update the old pension provider, you could lose contact with them and, over time, you may forget about that pension altogether.

Data from the PPI shows that this is becoming more common. The number of lost pension pots has increased by 75% between 2018 and 2022, and there are several potential reasons for this.

Firstly, the Covid-19 pandemic encouraged more people to move home. Data from Property Reporter shows that 266,270 people moved in the first half of 2021 alone. This increase could mean that more people have lost contact with old pension providers.

Additionally, attitudes to work are changing and loyalty to employers is dropping. According to career research website Zippia, the average person changes jobs 12 times in their lifetime. However, younger people are more prone to job-hopping. The average 25 to 34-year-old stays in a role for 2.8 years, while 55 to 64-year-olds stayed for 9.9 years.

The combination of these two factors means that you may find yourself dealing with more than one pension provider, increasing the chances of you losing track of your savings.

But is it worth tracking these lost pension pots down?

Finding lost pension pots could make retirement planning easier

The PPI estimates lost pension pots are worth an average of £9,470 each, so it could be an excellent opportunity to boost your retirement fund. If you are concerned about the impact of rising living costs, the money in old pension pots could help make up the shortfall.

It’s not just about the extra money though, as finding a lost pot can also help you to make more informed decisions. Creating a retirement plan is far easier when you have all the information.

Some of the old pension pots may have higher fees, or they could be performing poorly. Thankfully, you have options that could help you maximise those savings once you find the lost funds.

You may consider consolidating smaller pensions into newer schemes that perform better or have lower fees. This can make your pension savings easier to manage, and you may find your savings are better aligned to your goals.

That said, your existing schemes may be performing well, or you may lose valuable benefits when you transfer. So, it can pay to take professional advice before you make any choices.

Furthermore, it’s better to take control of your pension funds now, while you still have time. If you wait until you are almost at retirement age, it could be a last-minute rush to find your savings and you may have already missed your chance to move them into more favourable pension schemes.

Contact old providers to find lost pension pots

If you think you may have lost a pension pot, start by making a list of all of your employers and note whether you had a pension with them or not.

The full auto-enrolment rollout was completed in February 2018, so you should have a workplace pension for any job you started after that date. But, you may want to double-check with any employer you worked for before then.

Once you have a list of all of the pensions you think you should have, you’ll need to find contact details for the providers. You can either get in touch with old employers or, if they can’t help, use the government’s free Pension Tracing Service to find the relevant information.

Remember, the Pension Tracing Service doesn’t tell you whether you have a pension with that provider or how much it is worth. It just gives you contact details for providers or old workplaces. It’s up to you to contact them to learn more.

When you get in touch with the provider, they will give you the details you need to access your savings.

Recovering lost pension pots gives you full control over your pension funds, so you are not missing out on any of your hard-earned savings.

Get in touch

If you need more advice on planning for retirement, we are here to help.

Please visit our contact page or get in touch with your adviser.

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pension Regulator.

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Benchmark Financial Planning is an Appointed Representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority, the registration number is 223112. Registered office: Broadlands Business Campus, Langhurst Wood Road, Horsham, West Sussex, RH12 4QP. Registered in England and Wales No 07572431.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk

The guidance and/or advice contained within this website are subject to the UK regulatory regime and are therefore targeted at consumers based in the UK.