Looming problem of lost pensions risks undermining retirement planning

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on the findings of the Opinium survey on their behalf, showing looming problem of lost pensions risks undermining retirement planning.

Key survey findings:

People may accumulate several pensions during their working life, and it is important to keep track of them to make sure you take all the pension income you can.
45% of those asked said they had one pension while over a quarter (28%) said they had two. Over one in ten (12%) said they had three.
While 22% of aged 55-64 with a pension said they had three or more pensions, this rose to one-third of 18-24 and 35-44-year olds.
Given younger people are likely to have several more jobs during their lifetimes they risk losing track of several pensions. This could have a big impact on their retirement planning.
National Pension Tracing Day (31 October) aims to raise awareness of keeping track of lost pension pots.
Survey of 1,000 people carried out by Opinium on behalf of Hargreaves Lansdown.

Helen Morrissey said:

“If younger workers have already accumulated three or more pensions, we have a looming problem of people losing track of what they have. This means they aren’t going to get as much pension as they should when they retire.

“The concept of a job for life no longer exists and the reality is most people will work for several different employers and accumulate a number of pensions over their working lives. As you shift employers and then move house you can forget to keep your details updated and before you know it you have lost track of old pensions and this can be further complicated if an ex-employer was to be taken over and change its name, or go out of business.

“The DWP has stated this could result in up to 50m lost pensions by 2050 with these people potentially missing out on thousands of pounds of hard saved pension savings that could really boost their income in retirement.

“National Pension Tracing Day aims to raise awareness of this issue and we would urge people to take some time to track down any lost pensions -it could make a big difference to the income you receive in retirement.”

Tips for tracking down lost pensions:

If you have lost details of an old pension scheme contact the government’s tracing service on Find pension contact details – GOV.UK (www.gov.uk) It won’t tell you how much is in the pension but it will help you find contact details.
You need the name of the company you worked for, the name of the pension scheme, or the name of the pension provider.
If you prefer to speak to someone then call the Tracing Service on 0800 731 0193– Monday to Friday, 8am to 6pm
Whenever you move home it is worth adding pension providers to the list of people you need to notify so they have up to date contact details for you and you don’t miss out on important communications.
If you have accumulated several different pensions over your working life it might make sense to consolidate them so you don’t lose track of them. This can help you have a much clearer idea of exactly how much you have so you can plan with more certainty.
However, think carefully before you consolidate. Some pensions might operate expensive exit fees if you transfer or you might miss out on valuable benefits like guaranteed annuity rates so take advice or guidance as necessary to make sure you come to the right decision for you.

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay