More than 1.6million have a ‘lost’ pension – are you missing out on £13,000?
More than 1.6million pension pots worth nearly £20million could remain unclaimed
MORE than £20million is sitting in a “lost pension mountain”, according to estimates from an insurance industry body.
Some 1.6million lost pension pots worth nearly £20billion could remain unclaimed, with people often losing track of their savings due to job changes or moving house, the Association of British Insurers (ABI) says.
It describes the scale of the lost pensions problem as “jaw-dropping”.
Research by the Pensions Policy Institute (PPI) on behalf of the ABI looked at firms representing 50 per cent of the private defined contribution (DC) pensions market.
It claims to have found 800,000 lost pensions worth an estimated £9.7billion
It estimates that, if scaled up to the whole market, there are collectively around 1.6million pots worth £19.4billion unclaimed – the equivalent of nearly £13,000 per pot.
How to consolidate your pension pots and find the ones you've lost
HERE are some tips
- Try to avoid having more pension pots than you need – When you change jobs, either transfer your old pension across to your new employer’s scheme, or see if your new employer is willing to make contributions to your existing pension so you can keep that one going.
If you are looking at transferring, then always check first whether you’ll pay any penalties or might be giving up any valuable guarantees. - Keep track of where your money is invested in your pension – Don’t assume the default fund you were put into is the best one for you.
It is always worth taking the time to see if your savings could be working harder for you elsewhere.
You may be able to save money on charges or get a better investment return. - Always notify pension companies if you move house – it‘s very easy to lose track if they don’t know where to find you anymore
- Use the government’s pension tracing service – Check for any pensions you may have
- Go through your old paperwork: Most pensions schemes will send you an annual statement that will tell you the balance of the pension at the time of the statement and a projection of what income it might generate when you reach retirement age.
Once you found the right document, you can contact the pension provider to update your details. - Contact your old employers: You can find template letters for contacting an old employer about a lost pension on the .
The ABI said the overall lost pensions figure is likely to be even higher – as the research did not look into lost pensions held in the public sector, or with trust-based schemes typically run by employers.
It said providers make considerable efforts trying to reunite people with lost or forgotten pensions.
In 2017, more than 375,000 attempts were made to contact customers, leading to £1billion in assets being reunited with them.
But, the ABI said that with people often moving around, a pensions dashboard which would enable people to see all their pensions in one place online is now more important than ever.
The pensions industry has been working on the development of a dashboard.
The average person will have around 11 different jobs over their lifetime, and move home eight times.
As more people take up pensions with the roll-out of automatic enrolment, it is estimated there could be as many as 50 million dormant and lost pensions by 2050.
Am I on track for a comfortable pension?
IF you are only putting in the minimum amount for your pension then you are not saving enough for a comfortable retirement. Here's how much you'll need according to consumer group Which?.
- Which? reckons that you need to be saving £131 into your pension a month from age 20 to be able to have a comfortable retirment.
- Anyone over 30 would have to save up to £198 a month.
- If you start at 50, you need to be saving a staggering £633 a month to be able to have a £26,000 a year income when you retire.
But these figures assume your employer pays his or her part of your pension contributions – so if you’re self-employed you need to be saving even more each month.
Yvonne Braun, the ABI’s director of long-term savings and protection, said: “These findings highlight the jaw-dropping scale of the lost pensions problem.
“Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers.
“The industry has stepped up its efforts to re-connect savers with their lost nest eggs, developing a new framework launched earlier this year to help pension providers trace ‘gone-away’ customers more consistently.
“But industry efforts can only go so far – we need a radical digital solution to cope with the way society is changing, or the problem will get worse.
“It is important that the Government stands by its promises to take forward the pensions dashboard. This project has cross-party support, with the backing of consumer groups, and could mean a more secure retirement for millions of savers.”
People can use the to track down lost pensions.
Helen Morrissey, a pensions specialist at Royal London said: “These figures are astonishing and confirm the need for the Government to move forward with the pensions dashboard as quickly as possible.
“Having a dashboard in place enables people to keep track of the pension savings they have built up with different providers and employers which helps them make more informed decisions about their retirement.”
Parents with children under 12 may also be missing out on state pension income – here’s how to claim what you’re owed.
Don’t let scammers trick you out of your pension. Here are our tips to protect your pension from rip-off fees as victims lost £91,000 on average to saving scams last year.
It was recently revealed that public sector staff will retire on pensions ‘THREE times larger than their private sector counterparts’.