Martin Lewis provides advice on tracking down lost pensions
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Research from Profile Pensions found that as many as 1.6million lost pension pots worth £19.4billion could remain unclaimed, with moving house being the main reason people lose touch with their pensions. They discovered that people lose around £23,000 on average, which is a massive amount of money people are potentially losing out on.
The analysis uncovered around 800,000 lost pensions worth an estimated £9.7billion. When scaled up to the size of the whole market, this means that an estimated 1.6million pensions worth a total of £19.4billion could be lying unclaimed. In order to amass one’s desired amount of retirement savings and get the most out of retirement, it is vital to find any potentially lost pensions.
It appears that moving home is the most common reason why people’s pensions are lost. For those moving house frequently, it can be easy to forget to notify pension providers of a change of address. Failing to do so could mean not being able to see the annual statements providers send out, and therefore lose track of our retirement savings as a result. The Government estimates that there could be as many as 50 million dormant and lost pensions by 2050.
Changing work patterns is another reason people can forget about one or more of their pension plans. It is rare these days for someone to stay in one job for their entire working life, with the Department for Work and Pensions calculating that the average person will have around 11 different occupations over their lifetime.
Michelle Gribbin, Chief Investment Officer at Profile Pensions said: “Our research has shown that people lose on average £23,000 from lost or untracked pensions. This is clearly a huge amount of money for anyone to be missing out on.
“People move jobs and houses during their lifetime, so it’s understandable that tracking pensions can become difficult. But with an additional amount of money like that to consider when retiring, it’s worth getting your pension consolidated.”
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Having multiple pension pots can ultimately make it more difficult to keep track of one’s retirement savings, and this is an issue that could impact a lot of people, as research by insurer Aegon found that just under two thirds (64 percent) of UK adults have more than one pension.
Among those with multiple pensions, more than one in five people are aware of having at least one lost pension pot, which is equivalent to more than seven million. This is supported by Profile Pensions’ analysis, which revealed that one in four under 55s thought they had lost track of at least one of their pensions. This could equate to a whopping 1.6 million unclaimed pensions worth £37 billion.
Profile Pensions have committed to helping Britons retrieve their lost pensions, tracing and recovering over £152 million worth of retirement savings since 2017. Here is our list of the top most reclaimed pensions by region. They have been most prolific in Birmingham, finding 229 lost policies totalling £5.3million.
Sheffield, Peterborough, Newcastle-upon-Tyne and Belfast have also been British hotspots for uncovering missing retirement savings, finding a combined 668 previously lost pensions worth £15.9million
The Government is working on a new ‘pensions dashboard’ in order to help people keep track of their pensions and reduce incidents of lost retirement savings. The service should enable consumers to see their pension arrangements online in one place, but until then, the responsibility falls on each individual to keep track of their pension pots.
Finding a lost pension could make a sizeable difference to retirement income and ultimately boost one’s standard of living after they stop work. The sooner any lost pension pots are found, the better.
Ms Gribbin said: “Ensuring you have a full understanding of where your pensions are and how much they are worth can make a huge difference to quality of life during retirement.”
An option for people who have multiple different pensions is to consolidate them, so that they have just the one pension to keep an eye on. However, it is important to seek financial advice before making any decisions, as some pension plans come with valuable benefits which may be worth keeping.
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