s a financial adviser, a topic I am regularly asked about is investing, often considered exciting and sexy. Yet when it comes to the topic of pensions? Complex and boring.
What isn’t so boring is that the average lost pension pot is worth £9,500. And given one in five people in the UK has lost track of a pension, the possibility that one or more of the 2.8 million lost pensions could be yours is very real.
A ‘lost’ pension is where the pension company cannot contact or trace the owner, it has been dormant for an extended period of time, or the pension provider does not actually know who the owner of it is.
The ‘pension-demic’ is becoming so big that a campaign was recently launched to drive up engagement around lost pensions, in association with grime artist and TV cook, Big Zuu, who even produced a new track and video, ‘Pay your pension some attention’.
According to campaign Manager Sarah Cordey, “the campaign isn’t about increasing contributions; it’s about increasing savers’ awareness and making them feel good about their pension”.
There are three key reasons why people lose track of pensions. The first is changing jobs multiple times, with the average worker aged 45+ having switched employers six times (according to The People’s Pension) – meaning there are up to six potential pensions to keep track of.
The second is moving house and forgetting to update pension providers with your latest address. According to the Pensions Policy Institute, 89% of people will think to update their GP or dentist but only one in 25 people would think to tell their pension provider they moved home. As a London renter I have lived at five different addresses within the last five years and the admin of updating on a change of address is huge.
Finally, many people, particularly younger generations do not fully understand the importance of pensions. With the cost of living crisis upon us, every single penny counts. Missing out on money you are entitled to and can access in the future could make a huge difference to your standard of living in later years when you can access your pension funds.
Taking action now to find your lost pension allows you to review the costs being applied to it as well as what it is invested in. Doing this sooner rather than later can have a huge impact on the value of your pension pot over the longer term.
How to find your lost pension
1. The first step is to dig out any old paperwork that you may have which would tell you who your pension is with. If you remember who the pension provider was, google them and give them a call directly and explain the situation. They can check their system to locate your pension, update your contact details and provide you with all of the information you need.
2. If you have no luck with this, contact your old employer/s (ideally the HR department). Ask them if you had a workplace pension and if they will confirm who the pension provider was. You can then contact the provider directly.
3. Finally, the government has set up a free Pension Tracing Service to help you locate your lost pensions. You can phone them on 0800 731 0193 or go to this website to submit a tracing form. Before using the service, try and collate as much information, such as the name of your company, when you worked there and any other details which might help. The service will tell you the name of the pension provider who you can then contact.
Once you have located your pensions it may be a good idea to consolidate them into one pot to make them easier to manage and stay on top of moving forwards. This is really simple to do, you can make this request to your current pension provider, and they will do all of the work for you, letting you know once your pensions have been transferred.
If you are confused or unsure about consolidating your pension pots it is wise to speak to a financial adviser who can review each pension and provide advice on the best option for you. Try Unbiased.co.uk or Findadviser.org.
Emma Fielding is a chartered financial planner at First Wealth. She focuses on lifestyle financial planning which is centred around a client’s financial wellbeing.
