How to reclaim your lost pension pots

By Susan Pringle, Managing Director

It’s now more than a decade since pensions auto-enrolment was introduced, yet in the most recent Great British Retirement Survey by Interactive Investor, worryingly one in four people asked said they knew nothing about pensions. As UK pensions awareness week rolls around again (11th – 15th September 2023) to tackle the issue, it sees many savers fretting about the impact soaring costs of everyday items is having on their retirement plans.

Statistics reported by The Actuary revealed a staggering 70% of workers are grappling with the notion of delaying their retirements and the most recent data from UK Government’s Office of Budget Responsibility show that the number of working-age retirees is now 50,000 below pre-pandemic levels.

If you are worrying that you can’t afford to retire, don’t give up hope just yet. If you’ve been a job hopper or moved house over the years, there’s a chance you could be one of the three million people in the UK able to bolster savings by unearthing forgotten pension pots.

Every time you have embarked on a new chapter in your career, there’s a good chance you started contributing to a fresh pension scheme, leaving the old one dormant. And the simple act of moving house without notifying your previous pension provider could lead to a disconnection with your hard-earned pension savings.

Last year the Pensions Policy Institute (PPI) revealed a treasure trove of £26.6 billion lying in unclaimed funds. According to PPI estimates, the average amount languishing in each unclaimed pension pots is £9,470. These orphaned assets could be the key to enhancing your golden years, so it pays to research your pension funds whereabouts meticulously to reclaim what’s rightfully yours. When deciding on a retirement strategy, having a complete picture transforms the decision-making process.

Timing Is of the essence, and the time to seize control of your pension funds is now. Delaying it until you are ready to retire could result in a frantic last-minute scramble, and you could lose out on the chance to transition to more advantageous pension schemes. Some of these forgotten pots may bear higher fees or may have stumbled in their performance. The option to consolidate smaller pensions into more lucrative or lower-fee schemes can simplify management, aligning your savings more closely with your objectives.

However, a word of caution. While the prospect of consolidation is appealing, the existing schemes may have their own merits, or you could lose out on valuable benefits during the transfer. It’s wise to seek professional counsel before making these decisions.

The first step to reclaiming what’s yours is to draft a comprehensive list of all the employers you have worked for over your lifetime, noting whether you were affiliated with a pension scheme during the period of your employment. A study by career research website Zippia reveals that the average person transitions through 12 jobs during their lifetime. Any job you undertook post February 2018 should be associated with a workplace pension thanks to the rules on auto-enrolment.

Once your list is complete, the next step is unearthing contact information for the relevant pension providers. Your initial point of contact could be your previous employers, and if this route bears no fruit, the government’s Pension Tracing Service can provide the necessary information.

Remember, while the Pension Tracing Service discloses contact details, it doesn’t offer insights into whether you possess a pension with that provider or its value. The onus lies on you to initiate contact with the provider to find the details needed to help to access your long-lost savings. A good financial planner will help you find your way through the pensions maze and pull everything together. It might help to look for one with good knowledge of local employers and the public sector pensions landscape.

There’s nothing more satisfying than hunting down your hidden wealth and reclaiming lost pension pots allows you to have full control over your retirement funds, ensuring you don’t miss out on the fruits of your labour.

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