Total value of lost pension pots £26.6 billion in 2022
Tracking down a lost pension pot can be daunting, especially if you’ve switched jobs multiple times throughout your career. The good news is that resources and strategies are available to help simplify the process.
According to research, one in six (16%) UK adults have attempted to trace or find a pension that has been lost or forgotten, with only one in ten (9%) managing to do so successfully[1]. Amidst the current cost of living crisis, these lost pensions could be a lifeline for many facing financial hardships.
The average lost pension total found was £6,351
Among those who have managed to find their lost pension, the average total was £6,351. Most respondents discovered pensions worth between £1,000 and £5,000 (24%). However, nearly one in ten (8%) traced pensions worth over £20,000.
Despite the substantial amount of money at stake, worryingly, one in ten (8%) individuals know they have a missing pension but have yet to try to trace it.
Starting the search journey sooner rather than later
The lost pensions challenge in the UK has escalated significantly in recent years, particularly exacerbated by the pandemic, which led to many people changing jobs. The Pension Policy Institute estimates the total value of lost pension pots at a staggering £26.6 billion in 2022[2]. Given the potential benefits, starting the search journey sooner rather than later is crucial.
Here are some tips for finding a lost pension
Keep your information updated
With the introduction of auto-enrolment in 2012, around ten million people have started saving for their futures through employer-sponsored pensions. Each new job potentially means a new pension scheme. Make sure to update all of your pensions with any changes of address.
Retain details
Keep a record of all the pension schemes you’ve been enrolled in.
Use the government’s tracing service
This is a free service designed to help if you can’t find the details of an old pension scheme. You can call the tracing service on 0800 731 0193.
Research your options
Once you have found any missing pensions, explore your next steps, including consolidation, which brings them together in one place.
However, be careful as there may be valuable benefits attached to your pensions which you may lose if you consolidate. Always double-check and seek professional financial advice to ensure you make the right decision.
Source data: [1] Research conducted by Opinium among 2,001 UK adults between 25–28 October 2022. [2] https://www.pensionspolicyinstitute.org.uk/sponsor-research/research-reports/2022/2022-10-27-briefing-note-134-lost-pensions-2022-what-s-the-scale-and-impact/
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.
A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).
THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.