There is currently an estimated £19.4 billion worth of pension funds in the UK that have not been claimed meaning millions of people are at risk of missing out on a potentially more secure retirement. Around 1.6 million pensions have been left unclaimed in the UK meaning on average, each person with lost pensions is missing £13,000.
“But failing to keep track of where your money is held isn’t just a problem for later, it could be costing you money now. That’s because different pensions have different charges, as well as different plans to grow your money.
“If you’ve got money languishing in a scheme where there’s not a lot of growth, and rather high charges, you’re potentially missing out on tens of thousands of pounds worth of growth between now and when you retire.
“The good news is that it is possible to transfer pensions, for example combining any old pots into your current workplace one to keep things simple, but only if you remember where all your money is now and make the effort to track it down.
“But the sooner you do it, the sooner you might be able to benefit from lower charges and potentially better growth in your savings.”
Thinking about tracing pensions may seem overwhelming for some people but James explained that there are many ways people can figure out if they have lost or old pensions with various pension tracing guides.
Another way people can search for old pensions they may have is through any filed paper work.
People often have paper trails, or email threads between them and pension providers. It’s crucial for Britons to look for any communication they have had with pension suppliers.
Additionally, people should look at their employment history. Documents sich as contracts or payslips might offer people an insight into their previous pension schemes.
He suggested people search for any reference to pension deductions or even the name of the company’s pension scheme provider. If people have no luck, they can also contact their previous employer and request details on their scheme.
Lastly people can use the governments pension tracing service that lets employees search thousands of workplace and personal pension scheme databases to find any personal records. Money.co.uk’s also have a pension tracing guide that people can use.
Once people find their lost pensions it could be beneficial to consolidate them into one pot for ease of access in the future and a more simple management process throughout your remaining years before retirement.
James explained that it also makes sense to put money somewhere with lower fees, also keeping it in one place may ensure that people will not lose their entitled special benefits in transfer, such as a guaranteed annuity rate.
The “most important thing” is to know where one’s retirement savings are located and keep an eye on your accounts.
When people have a handle on these, whether that be a consolidated pot or multiple accounts, they can check up on them regularly and make sure they tell them about any new jobs or changes of address and continue ongoing contributions in order to set themselves up for retirement.
James concluded: “When planning for the future it is important to stay on top of your savings, including where your pensions are being held. Taking time to track down old pots can be invaluable to your future retirement prospects.
“That’s because there might be changes since you last looked at them in where the money is being held as well as differences in management fees. Considering you can transfer money between registered pension schemes and keep all your tax benefits, it makes little sense to have some savings being charged higher fees than others.
“It’s also good to know what your money’s invested in – so having all your savings in one place will make life far simpler to both check up on funds as well as move your cash where you want it to be.”