.jpg)
Imagine discovering a long-lost savings account containing thousands of pounds that you didn’t even know you had. For many, this is exactly what tracking down forgotten pension pots can feel like.
Recent research from FTAdviser reveals that more than one-quarter of savers in the UK are unsure of how many pension pots they have. On average, they estimate having around £13,303 spread across three lost pots.
Finding any pots that you have lost or forgotten about could provide a significant boost to the overall value of your retirement fund, potentially helping you achieve your dream lifestyle once you give up work.
Continue reading to discover why you may have lost track of your pensions, and some compelling reasons to locate them.
If you’ve worked many jobs in your life, you may have forgotten about workplace schemes
One of the major reasons you may have lost track of your pensions is due to a change in attitude towards careers. The concept of a “job for life” is seemingly becoming a thing of the past, with modern workers tending to move between roles more frequently.
In fact, a survey from Open Study College found that workers aged 25 to 34 have already held an average of six different jobs, while older adults nearing retirement may have worked in as many as seven.
Since 2012, employers have been legally required to automatically enrol eligible employees in a workplace pension scheme. Over time, it’s easy to accumulate multiple pots without realising it, particularly if your contributions were modest or you didn’t actively manage them.
Additionally, amid the busyness of everyday life, you may have simply lost track of your old pots, including any self-invested personal pensions (SIPPs) you may have started in the past.
Moving house could be a common culprit for losing track of old pensions, as you may have forgotten to update your pension providers with your new address.
There are several helpful benefits to tracking down forgotten pension wealth
Locating your lost pension pots offers several practical benefits, all of which can affect your retirement – read on to discover some of these.
You could bolster the overall value of your fund
Perhaps the main advantage of tracking down your lost pension pots is that you could significantly boost the overall value of your retirement fund.
The Pensions and Lifetime Savings Association estimates that 3.3 million pension pots are considered “missing”, each with an average value of £9,470, or £13,620 for those aged between 55 and 75.
While this figure might not seem impactful on its own, combining several pots and factoring in growth over time could make a significant difference to your retirement savings.
Even modest contributions made years ago could have grown considerably thanks to the effects of compound returns, as gains are usually reinvested automatically.
Over time, this compound growth could offer you ample opportunities to save, invest, gift, or spend more wealth when you stop working.
Labour Party policies could boost the value of your savings further
If you’re still debating whether it’s worth the effort of tracking down forgotten pensions, the government’s proposed changes might give you even more reason to act.
In the King’s Speech following their election win, the Labour Party unveiled plans to improve pensions through its proposed Pension Schemes Bill.
This aims to automatically consolidate small pots worth less than £1,000 and requires providers to demonstrate value for money. According to MoneyWeek, these measures could increase the average pension fund by around £11,000.
These changes could make it even more important to locate and keep track of all your available pension pots. After all, the more you find, the more you could potentially benefit from this legislation.
It could offer peace of mind
Beyond the financial benefits, tracking down your lost pension wealth could also offer some much-needed peace of mind.
Indeed, knowing that every penny of your retirement wealth is accounted for could offer greater confidence in your financial future.
Not only could this free up some mental energy, but also allow you to focus on enjoying your hard-earned wealth.
3 simple methods to locate old pension pots
1. Contact your previous employers
If you know you were enrolled in a scheme during a past job but don’t have the relevant details, an effective starting point could be contacting your former employers.
They could then provide the name of the pension provider and any information they have on file.
While the process of compiling your lost pots might take some time, especially if you’ve worked in multiple roles, it remains a reliable way to gather the necessary information.
2. Talk to your old providers
If you still remember the names of your previous pension providers but lack specific details, it might be worth contacting them directly.
Before doing so, you may want to have as much information on hand as possible, such as:
· The year you started the pot or were enrolled in the scheme by your provider
· The rough value of your pot if you have any idea
· Your home address at the time you were last paying into the pot
· Your National Insurance number.
Providers may also request proof of identification before granting access to your account. Once verified, they can provide updates on the current value of your fund and help you manage it moving forward.
3. Use the Pension Tracing Service
If all else fails and you can’t find any details about your previous pensions, it might be prudent to use the Pension Tracing Service offered by the government.
This database of information could enable you to search for details about previous schemes you’ve contributed to, offering an accessible way to piece together your history and find savings you had forgotten about.
Get in touch
If you’re still seeking ways to bolster the value of your pension fund so you can secure a comfortable retirement, then we can help.
Email info@athertonyork.co.uk or call us on 0208 882 2979 to find out more.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Comments