The total value of lost pension pots now stands at over £32.1bn — a £4.5bn increase over the past two years according to new data from the Pensions Policy Institute (PPI).
Auto-enrolment and more frequent job changes are fuelling this problem, with the PPI estimating that there are now almost 3.3 lost pension pots, with the average value standing at £9,470.
For those in the 55 to 75 age bracket the average value of lost pension pots is £13,620.
Earlier this week pensions minister Emma Reynolds repeated the government’s commitment to developing pensions dashboards, which it is hoped will hep address this issue by making it easier for savers to locate and consolidate older pension plans.
Alongside this the Department for Work and Pensions is currently working on plans to automatically consolidate small pension pots of less than £1,000.
AJ Bell head of of public policy Rachel Vahey says: “Automatic enrolment is often held to be one of the most successful public policies of our time. It is credited with enrolling over 11 million people into a workplace pension since 2012, creating many new pension savers.
“But with people switching jobs regularly – around 11 times over the course of a lifetime according to some estimates – it’s easy to see how some people lose track of the pension pots they have built up.
“Knowing how much they have saved in a pension, and where that money is invested, is one of the most important steps savers can take to maintain a level of control over their future retirement. Only by having this overall picture can pension savers work out how close they are to achieving their financial goals, and what action they may need to take to get their desired income and standard of living in later life.
“The government is on the road to helping people achieve this. Pension Dashboards, once launched, will allow savers to see all their pensions in one place online, reuniting them with their lost pension wealth.”\
But she adds it will be a number of years before there is a functioning dashboard, so people should take steps today to track down lost pensions pension savings.