According to a recent survey conducted by Opinium in May 2023, it was revealed that a significant portion of individuals struggle to keep track of their pensions.
The survey, which involved 2,000 participants, found that 24% of respondents admitted to losing track of a pension, while an additional 22% were uncertain about the status of their pension plans.
Interestingly, the study showed that younger individuals were more prone to losing track of their pensions, with a staggering 44% of those aged between 18 and 34 reporting that they had lost track of a pension. In contrast, only 7% of individuals aged 55 and above expressed the same concern.
The survey also shed light on the commonality of having multiple pensions among participants. Approximately 31% of respondents disclosed that they currently hold three or more pension plans. This trend can be attributed to the dynamic nature of employment, as people frequently change jobs throughout their careers.
Given the prevalence of lost or forgotten pensions, it is crucial for individuals to take proactive measures to locate and assess their pension funds. Moreover, the survey emphasized the importance of considering pension consolidation, which involves merging multiple pensions into one. However, it is essential to approach consolidation with caution to ensure that valuable benefits are not forfeited and excessive fees are not incurred.
These findings highlight the need for increased awareness and active management of pension plans. By staying informed about their pensions, individuals can make informed decisions to secure their financial future effectively.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown:
“We tend to change jobs several times during our working lives, and this means we are likely to accumulate several pensions. This is especially the case for younger people who started work under auto-enrolment and may only have stayed with employers for a few years before moving on. Over time, it can be easy to lose track – you may move jobs or house and don’t update your contact details.
It's a massive issue with almost a quarter of us admitting we’ve lost track of a pension – many more of us are unsure if we have or not. You may think your lost pension is only very small and doesn’t matter but long-term investment growth means over the years it will grow so they could be worth much more than you think. According to research from the Pensions Policy Institute the average size of a lost pot is more than £9,000. For some people, the pensions found are worth much more so the issue of lost pensions can have a huge effect on our retirement planning. It means it’s well worth taking some time to track them down.
Finding a lost pension could be the difference between struggling to make ends meet or being more comfortable in retirement. It might mean you can afford go part-time in the years before retirement or you don’t need to work for so long. It’s vitally important to keep your contact details for your pensions up to date. If you think you have lost track of a pension, contacting the government’s pension tracing service can help you locate it.
Once you’ve located your lost pension, it might make sense to consolidate it with any other pensions you may have. This makes it easier to keep track from an administrative perspective and you have a clearer view of what your savings are -this could affect your retirement decision making.
However, before doing this, it is important to check whether there are any terms on old pensions that mean you might lose out on valuable benefits or cost you money if you decide to consolidate. For instance, older policies might incur expensive exit fees if you try and move them, or they may have attractive terms like guaranteed annuity rates. If in doubt take guidance or advice to make sure you make the best decision for your needs.”
