It can be easier than you think to lose your retirement savings. In fact, estimates suggest thousands of savers have forgotten about pensions that could support their retirement goals.
31 October marks National Pension Tracing Day, so it’s the perfect time to review your savings and see if you could reclaim lost money.
As you could be paying into a pension for decades before you can access it, it’s easy to lose touch with some of your savings. Perhaps you’ve changed your job or moved home and didn’t update your details.
Even small sums in a pension can support your retirement goals, so it’s worth spending some time tracking down lost savings.
1 in 3 savers worry that they’ve “lost” a pension
It’s becoming more common to switch jobs frequently during your working life. As a result, many employees will build up multiple pensions during their careers, and it is hard to keep track of the different pots.
Research published in FT Adviser found that 1 in 3 people worry they’ve lost or forgotten about a pension when they’ve switched jobs.
It’s estimated that 5.5 million workers have three or more pensions. So, it’s not surprising that a quarter of savers say it’s difficult to keep track of what they’ve put away for their retirement.
You could have more than you think in lost pensions.
According to figures from Gretel, there are 1.6 million unclaimed pensions with an average value of £23,125. Finding old pensions could mean the difference between reaching your retirement goals and having to make unwanted compromises in your lifestyle in later life.
4 simple steps that could help you find a “lost” pension
- Search your old paperwork and emails. While it can be a tedious task, your old paperwork and emails are an excellent place to start if you’re looking for savings that you’ve forgotten about. Keep an eye out for pension statements so you can identify gaps.
- Go through your career path. Spend some time listing your old jobs. If you have paperwork for these positions, such as old payslips, you may notice pension contributions that you’ve previously overlooked.
- Get in touch with old employers. If you spot a gap in your pension history, try reaching out to your previous employer’s HR department. They may be able to pass on details about the scheme.
- Use the Pension Tracing Service. If you find a lost pension but aren’t sure who to get in touch with to find out more, the Pension Tracing Service is useful. This can provide contact details, including if a pension provider has been taken over by another company.
While you’re going through the process of finding lost pensions, don’t forget to review the details of the pensions you know about.
Make sure the contact details each provider holds are correct to avoid losing touch with these pots.
What should you do when you track down a “lost” pension?
If you find a pension you’ve forgotten about, the first step is to make sure you keep the paperwork in a safe place to ensure you don’t lose it again.
You will then need to decide what you want to do with the pension.
You may want to keep the savings separate from your other pensions. If the pension provider offers benefits, such as being able to access your pension earlier than usual, this can be valuable.
Alternatively, you could consolidate your pensions, so you don’t need to keep track of as many pots.
Consolidating can make it easier to manage your pensions and can make sense financially when you’re investing. It can also make understanding your retirement income easier.
However, consolidating is not always the right option. If you’d like to discuss whether you should consolidate pensions, please contact us.
If the value of your pensions is larger than you thought after discovering a “lost” pension, it’s a good idea to review your retirement plan. You may want to move your retirement date forward or change other parts of your plan if a reclaimed pension boosts your savings.
It’s not just pensions that are “lost”
While you’re reviewing your pensions, it’s worth assessing what other assets you may have “lost” too.
The data from Gretel suggests that more than 10 million people have bank and building society accounts they’ve forgotten to close, with £4.5 billion sitting in these accounts. It’s estimated that almost £10 million is sitting idly in investment and shares accounts, life insurance policies, and child trust funds.
Going through your old paperwork could give you a financial boost.
Contact us to discuss your retirement plans
If you have questions about your pensions and what it means for your retirement, please contact us.
Please note: 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 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. The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts.