Pensions - Articles - 3 million pension pots lost worth an average of £6,000 each

Despite this, more than half (55%) of job switchers who believe they may have lost a pension have never tried to trace it, with 27% of non-attempters unsure where to start and 17% believing it isn't worth the effort. Pension knowledge gaps add to the challenge, with almost three in ten (29%) unaware of their current workplace pension provider and over a fifth (22%) not realising changing jobs can leave them with multiple pots

Millions of people could be overlooking valuable retirement savings, with new research from retirement specialist Standard Life ahead of this year’s National Pension Tracing Day revealing that just a third (34%) of those who have worked for multiple employers know the full details of all their previous pension pots.

More than a quarter (27%) don't know where some or all of their pension pots are, including one in ten (10%) who don't know where any are held. The problem is particularly pronounced among younger workers, with more than a third (37%) of Gen Z who have changed employers unsure where some or all of their previous pension pots are, compared with just 15% of Baby Boomers.

This comes as research from the Pensions Policy Institute (PPI), supported by the Money and Pensions Service (MaPS), estimates that more than three million pension pots are lost across the UK, worth an average of £6,000 each. Around 2.5 million of these are thought to belong to people under 55, reinforcing Standard Life’s findings that lost pensions are not just a concern for those approaching retirement.

Among those who haven't searched, almost a third (31%) intend to but haven't got round to it, while over a quarter (27%) don't know where to start. Others are choosing not to look, with almost a fifth (19%) saying they don't have the time and 17% believing finding a previous pension isn't worth the effort.

Among people who have changed employers and believe they may have lost a pension pot, three in ten (31%) have successfully traced one, while one in ten (10%) have tried without success.

Standard Life’s research also reveals that significant knowledge gaps could be making it harder to find pensions that have already slipped off the radar and keep track for the future. Indeed, one in five (20%) are unaware or unsure that previous pots can be traced, while almost three in ten (29%) don't know who their current workplace pension provider is, potentially making it harder to keep track when they next change jobs.

Emma Furlonger, Managing Director for Workplace Pensions at Standard Life, said: “Changing jobs is a normal part of working life, but it's easy for pension savings to slip off the radar as people move between employers. Starting a new role means getting to grips with a new routine and benefits, so it's understandable that pensions built up with previous employers might not be front of mind.

“Everyone’s journey to and through retirement is different, but keeping track of savings built up along the way can help people feel better prepared. Even relatively small pension pots can add up over time, especially when they’ve had the opportunity to benefit from investment growth. The good news is that losing track of a pension doesn't mean the money is gone. There are straightforward ways to trace previous pots, and bringing them together could make them easier to manage, although consolidation won't be right for everyone.

“With the pensions dashboards connection deadline approaching at the end of October – when pension companies and schemes need to link up to the system that will eventually let people see all their pensions in one place – we're getting closer to a system that could give people a clearer picture of their retirement savings. Plans for automatic small-pot consolidation could also help tackle the issue of forgotten pensions. However, while these developments are encouraging, it will take time for savers to feel the benefits of the changes. Taking a little time to track down previous pensions now could make a meaningful difference to their retirement savings.”

Emma shares three top tips for people who have lost track of their pension pots: 

“For those struggling to find paperwork, all is not lost. You can contact previous employers to find out which pension scheme you were enrolled in. They should be able to provide details of the scheme or point you towards the pension provider, helping you take the next steps to track down your savings.”

“The government's free Pension Tracing Service is a good way to get up-to-date contact details for all of your pension schemes. Having your National Insurance number and dates of previous employment to hand can make it easier when contacting former employers or providers to track down your savings.”

“You could also consider bringing your pensions together into one plan, which can make them easier to manage and reduce paperwork. However, this isn't right for everyone, so it's important to check whether you could lose any valuable benefits or guarantees before making a decision.

“If you’re unsure about your options, you may want to seek advice from a financial adviser. You can find an adviser in your local area at Unbiased. You can also access free, impartial guidance from MoneyHelper.”