Lost pensions: how to find your retirement pots and why you should combine them

Changing jobs usually means getting not only a new employer but also a new pension, and keeping track of all those retirement pots can be difficult.

Since 2012, most employees aged over 22 have been automatically enrolled into workplace pension schemes as part of a government push to boost retirement saving. And “given that the average person will have 11 different jobs in their lifetime”, said Which?, the number of “lost” pots is growing.

Around 2.8 million pensions are now lost, an increase of 75% over the past four years, according to the Association of British Insurers (ABI) and the Pensions Policy Institute (PPI).

Over time, pension schemes may close, merge or be renamed, so finding a lost pension can be tricky. But with the average lost pot worth £9,470, taking time to track them down can have significant pay-offs.

Pension tracing services 

Most pension providers and former employers “are obliged to send you a yearly statement”, said Unbiased, and should be able to give you a clear overview of its status and value.  

If you’re no longer getting these statements, perhaps after changing your address, contact the provider, if you know who it is, or your former employer for a workplace pension. If your employer ran a private or stakeholder scheme, they should be able to give you the contact details you need. 

You will be required to provide information such as your National Insurance number, date of birth, when the pension was opened, and when you started and left your job. It may also be helpful to provide the pension plan number if you know it. 

If you’re still struggling to make progress, perhaps “because you can’t find the contact details of an old employer”, said Money Helper, contact the Pension Tracing Service. This free government service searches a database of more than 200,000 workplace and personal pension schemes to try to find the contact details. Phone the Pension Tracing Service on 0800 731 0193 or submit a tracing request form online.

A financial adviser could also help, plus there are private companies that can attempt to track down a pension on your behalf. 

What to do with old pensions

After finding any missing pensions, “it’s time to create an investment strategy that will provide you with the best possible retirement income”, said Unbiased. 

One option is to combine your old pension pots with your current scheme. 

There are advantages to combining your different pensions. Doing so “makes them easier to manage and reduces the likelihood that some of your savings will go missing”, said The Times Money Mentor. Combining pots could also improve your overall investment potential, since “it can be hard to monitor the performance of multiple schemes,” the site added. Plus, you’ll cut down on management fees.

Having your retirement savings in one place may also make life simpler when you reach retirement, as you will only have to decide how to take an income from one pension pot. 

But combining your pensions “is not always the right thing to do”, warned The Money Edit. Some schemes charge exit penalties or require you to take paid financial advice before leaving.  

Ask your pension providers about their fees, the investment range, the retirement options and whether there are any valuable benefits such as a guaranteed annuity rate. “You can then make an informed decision about which (if any) pension pots you should close, and the best one to roll the pots into,” the site said. 

In a bid to tackle the lost pots problem, the government is planning to introduce pensions dashboards to help people keep track. In theory, this “will let you view up-to-date details about your pension pots as well as the state pension in one place online”, Which? reported. 

But until these dashboards have been rolled out, help to ensure that your pension providers don’t lose touch with you by checking that the details they hold about you are up to date.  

Marc Shoffman is an award-winning freelance journalist, specialising in business, property and personal finance. He has a master’s degree in financial journalism from City University and has previously written for FTAdviser, ThisIsMoney, The Mail on Sunday and MoneyWeek. This article is based on information first published on The Week’s sister site, The Money Edit.

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