UK savers have failed to claim around 1.6 million pension pots worth nearly £20bn – at least six times more than previously estimated, the largest study of its kind has revealed.
However, the true scale of the UK’s lost pension mountain is likely to be even higher, with the latest research not looking at savings in the public sector, or those in trust-based schemes.
The researchers said frequent job changes and home moves were the main reasons behind the problem, with nearly two-thirds of savers now having more than one pension.
Dr Yvonne Braun, director of long-term savings and protection at the Association of British Insurers (ABI), which commissioned the research, described the findings as “jaw-dropping”.
“Unclaimed pensions can make a real difference to millions of savers,” she continued. “We need a radical digital solution to cope with the way society is changing, or the problem will get worse.”
There are a few ways to trace our lost pensions and request pension forecasts.
Most pension schemes will send us a statement each year. These statements include an estimate of the retirement income that the pension pot might generate when we reach retirement.
If employees are no longer receiving these statements, perhaps because of changes of address, then to track down the pension there are three bodies they can contact, which is the pension provider, the pension tracing service or our formal employer if it was a workplace pension. If they know which pension provider their pension was with, then the first step should be to contact them.
On the other hand, to trace a workplace pension, a scheme run by an employer, then the first point of contact should be the employer. However, if the employer provided access to a personal or stakeholder scheme, then employees should contact the pension provider if they know their details.
If someone is still struggling to make progress, perhaps it’s because they can’t find the contact details of an old employer, or they don’t know the provider of an old personal pension, they can contact the Pension Tracing Service. This is a free service which searches a database of more than 200,000 workplace and personal pension schemes to try to find the contact details.