Over the course of your career there’s a likelihood that you’ll have had several employers, and this may result in multiple Pensions to your name. There’s also the possibility that you’ve changed address several times, meaning a Pension provider may have lost touch with you if you didn’t update your contact details.
Forgotten Pensions may be even more of an issue since the introduction of auto-enrolment in 2012. This meant that any new employer typically had to enrol you into their chosen Pension scheme, and for many employees they’ll just go along with the assigned Pension, rather than consolidating or transferring Pensions into one.
Over time, that increases the chances of forgetting your Pensions, and it may be only as you get nearer retirement that you start to consider what’s happened to your lost Pensions. It could also be the case that you’ve taken out Personal Pensions, or had Pensions recommended by Financial Advisers. Over a period of what can be decades saving towards retirement, some of your Pensions may have been forgotten about.
Why it is important to look for lost Pensions?
It is important to look for your lost Pensions because you may have more wealth than you realise to your name. According to the Association of British Insurers, in 2022 there was approximately £26 billion sitting in 2.8 million “lost” Pension pots, with a further 3 million in pots not matched to their owner[i].
This is set to get even worse for future generations, with the Department for Work and Pensions predicting that there could be as many as 50 million dormant and lost pension pots by 2050. That’s a lot of money which you could be losing out on if you have lost or forgotten a Pension.
Think back over your career and carefully consider if there are any Pensions you may have forgotten about. It could make a real difference to your retirement if there any forgotten Pensions, as they may have been growing in value this whole time that they’ve been forgotten.
It could also be the case that you’ve been paying high Pension charges, in which case you may want to think about consolidating Pensions. This could make a difference to your retirement, as you can transfer away from higher charging Pensions, meaning you keep more of your money towards retiring. Those savings could add up to a significant sum over the years, particularly if they benefit from compounding growth in your investment.
How to track down your Pensions
When tracking down your lost pensions you can explore two routes. The first would be to track these down by getting in touch with a company like True Potential Wealth Management, using our dedicated Pension Finder Service. Our completely free-of-charge service is designed to make finding lost Pensions as hassle-free and simple as possible. All you need to do is provide us with a few details and our expert team will do all the work for you.
Once we have found your Pensions, you’ll be able to see how much you have saved for retirement and, if you wish, we’ll help you explore the option of consolidating your Pensions into one retirement plan
The second option would be to track down the lost pensions yourself. If you would you know the provider of your old Pensions, get in touch and they should be able to help you trace your Pension.
For Workplace Pensions, contact the HR department of your previous employers, they should be able to point you in the right direction.
There’s also a government pension tracing service which may be useful. A conversation with your financial adviser could also be a good idea, they may be helpful in having the industry expertise to find your old Pensions.
When looking for your Pension, providers may ask for details such as your Pension plan number, National Insurance Number, relevant dates, and employer details. Be prepared and have this information ready.
Advantages of consolidating your Pensions
Once you’ve tracked down your lost and forgotten Pensions, take the time to carefully inspect the costs and features. Think about your retirement goal, and how to put yourself in a stronger position to achieve your aspirations.
It could be advantageous to consolidate your Pensions into one investment. There are three main advantages to consolidating Pensions:
- It is easier to track performance against your long-term goals.
- It may be more cost effective relating to provider charges.
- You may be able to invest into an investment fund more suited to your needs and objectives
It is worth keeping in mind however that certain Pension policies can provide valuable guarantees, such as guaranteed annuity rates, protected higher tax-free cash percentages and protected retirement ages. Some plans, often workplace schemes, also benefit from low charges that cannot be matched elsewhere. These guarantees and benefits could be lost if transferred and therefore Pension consolidation is not right for everyone.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. This blog is not a personal recommendation or financial advice.
[i] https://www.abi.org.uk/news/news-articles/2022/10/call-on-uk-retirement-savers-to-take-action-on-26.6bn-in-lost-pensions/
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