A recent PPI analysis estimates that there is £26.6bn lying in unclaimed, inactive, or lost pension pots.
Punter Southall Aspire is launching National Pension Tracing Day on October 30 to raise awareness of these lost pensions. The campaign urges people to start their search and use the pension tracing tools.
According to recent data from the Pensions Policy Institute (PPI), the value of lost pension pots in the UK has increased by 37.7 per cent, or over £7bn, since 2018. Surprisingly, the entire amount of lost pots now equals one-fourth of the annual cost of the state pension. More than 2.8 million pots are now regarded as lost, a 75 per cent rise from the previous four years.
Punter Southall Aspire chief commercial officer Alan Morahan says: “The rising cost of living makes it all the more important that people track down the money they have worked so hard to earn and save.
“The combination of more people switching jobs more often and auto-enrolment becoming more commonplace is likely to result in more lost pensions. That’s why we are working with our industry partners to raise awareness of the issue and encourage consumers to take action.”
Punter Southall Aspire director of communications Johanna Nelson says: “When you are moving job or home, your pensions are probably the last thing on your mind, but as these figures show, it is so important to keep track or you risk losing out.”
“We really want to encourage everyone to use the extra hour on Sunday 30th to search for lost pensions. We hope the National Pension Tracing Day campaign will result in many finding their misplaced pots.”
Standard Life managing director Gail Izatsays: “Just knowing where to start looking for a lost pension can be daunting and that’s why we have developed a range of online support to help reunite our members with their pensions and plan for the retirement they’ve worked so hard for. No matter how small, if you’ve contributed to a pension in the past, the money’s yours, and we want to help you find it.”
“One of the ways in which the issue of lost pots will be addressed is through looking at the ways in which people are accumulating multiple small pots via auto-enrolment. There’s been lots of debate in the industry over the best way to solve the issue and the government introduced a working group designed to look at options for consolidating these savings.
“There’s a good rationale for consolidating small pots as the more people have the greater their interest in the pension. At Standard Life, our preference is for the introduction of a ‘pot follows member’ approach whereby pensions under a certain size automatically transfer when people change jobs. If properly implemented, savers wouldn’t need to do anything, and it would be a really easy concept for everyone to understand.”
Legal & General managing director of workplace savings Katharine Photiou says: “We’re a nation of job hoppers and as we move around our pension pots can get lost or forgotten. But with £26.6bn sitting in unclaimed pensions, it’s important we make pension tracing – and updating providers on any change of postal or e-mail address – standard practice, regardless of whether a lost pot is due to moving house, or moving jobs. The main aim of the Pension Dashboard is to help people plan for retirement by finding their various pensions and reconnecting them with any lost pension pots, as well as hopefully motivating them to save for their retirement and to proactively plan better for it. So it will be interesting to see what impact this has on unclaimed pots in future.
“At Legal & General, we have seen over 19,000 of our workplace pension members register for our tracing service since it launched two years ago. On average, those pension hunters have found an undiscovered pot worth more than £18,000, which just goes to show what a significant amount of money can be at stake. Our pension tracing provision offers an essential service to find missing pots – so you can sit back and let us do the heavy lifting.”
NOW: Pensions CEO Patrick Luthi says: “With many people taking stock of their finances amidst the rising cost of living, it’s deeply concerning that the value of lost pension pots has risen again, with worrying implications for savers approaching retirement. As lost pots now total £26.6bn, such a significant sum could be the difference between many people enjoying a comfortable retirement or just getting by.
“As an industry, it remains imperative that we establish an automatic consolidation solution that reflects our modern working patterns. With more job changes expected in people’s careers than ever before, we must find a holistic solution to make sure their pension savings follow them and are combined in one place that can be easily accessed upon retirement.
“With the number of small or deferred pots set to reach 27 million by 2035, we are actively working as part of the Small Pots Co-ordination Group to find a sustainable long-term solution. Action is essential to ensure all savers get the best possible retirement pot to enjoy the retirement they’ve earned.”
