Over a fifth of individuals are unsure of the whereabouts of their retirement funds: A guide to locating them
In the UK, it's estimated that over 3.3 million pension pots, worth a staggering £31.1 billion, have been 'lost' [1]. This article aims to provide a straightforward guide on how to manage your pension pots effectively, ensuring you don't miss out on valuable benefits and maintain control over your retirement savings.
Firstly, it's essential to ensure your pension providers have up-to-date contact information. This is particularly important when changing jobs, as it can simplify the process of consolidating pension pots [1]. Consolidation can reduce administration, potentially lower fees, and provide a clearer overall picture of your retirement savings [1][2][3]. However, older pensions may offer unique benefits that could be lost upon transfer, so it's crucial to research and weigh the pros and cons before making a decision [2].
A practical approach to managing your pension pots includes:
- Gathering details for all pension pots, such as provider names, policy numbers, and balances. Don't hesitate to contact past employers if necessary [4].
- If you cannot locate older pensions, use the Government's pension tracing service, which can provide contact details for lost pensions, even if the name of the provider is not remembered [4].
- Review each pension’s terms to evaluate benefits and fees [4].
- Consider consolidating into one self-invested or workplace pension plan to simplify management [4].
- Seek independent financial advice if you are unsure about transferring pensions or the best management strategy [4].
It's disconcerting to note that more than a fifth (21%) of people do not know where all of their pension pots are [5]. To find a lost pension, make a list of everywhere you've worked where you think you may have had a pension, check for paperwork, and use the Government's pension tracing service if necessary [5].
It's important to keep track of pension pots to avoid ongoing charges gradually eating into their value. With the average person having between 10 and 12 employers across their working life, each with separate pension schemes, it can be challenging to stay organised [6]. However, with a proactive approach and regular reviews, you can ensure you're making informed decisions about your retirement savings as your career progresses.
[1] The Guardian. (2021, March 1). The lost pensions timebomb: how to find your missing retirement savings. Retrieved from https://www.theguardian.com/money/2021/mar/01/the-lost-pensions-timebomb-how-to-find-your-missing-retirement-savings
[2] Pension Advisory Service. (n.d.). Transferring your pension. Retrieved from https://www.pensionsadvisoryservice.org.uk/learn/retirement-income/transferring-your-pension
[3] Money Advice Service. (n.d.). Consolidating your pensions. Retrieved from https://www.moneyadviceservice.org.uk/en/articles/consolidating-your-pensions
[4] Pension Wise. (n.d.). How to find a lost pension. Retrieved from https://www.pensionwise.gov.uk/find-a-pension/lost-pension
[5] Age UK. (2019, January 29). Lost pensions: The forgotten retirement savings. Retrieved from https://www.ageuk.org.uk/information-advice/money-matters/pensions/lost-pensions/
[6] The Telegraph. (2018, November 26). The average worker will have 12 jobs in their lifetime. Retrieved from https://www.telegraph.co.uk/news/2018/11/26/average-worker-have-12-jobs-lifetime/
- To effectively manage your personal-finance, particularly retirement savings, you should keep your pension providers updated with your contact information, as this can facilitate pension consolidation, which can reduce administration and potentially lower fees.
- It's essential to be proactive in tracking your pension pots throughout your career to ensure you're maximizing the benefits and minimizing ongoing charges that might erode their value, considering the average person has between 10 and 12 employers across their working life.
