Did you know that over 2.8 million pension pots are considered lost in the UK? These lost pots are worth an average of £9,470 each and could make a serious difference to people’s retirement if they’re reunited with their owner.
In this article, we’ll discuss how pensions become “lost” and the steps you can take to trace them. We’ll also show you how you can keep your pensions in one place for easy management with the help of Plum.
How do pensions get lost?
There are two main reasons why pensions get lost:
1) If you have changed jobs multiple times
The pension auto-enrolment system was introduced in the UK in 2012. Basically, this meant that all eligible employees were automatically enrolled on a company’s pension scheme. Before this, employees had to opt in. The new system enabled more people to build up their retirement fund and live a more comfortable “later life”.
However, it also meant that if you moved jobs you could end up with multiple pension pots, making them more difficult to keep track of and easier to lose.
2) If you have moved house
Moving home is stressful, and the admin that goes along with it is tedious. You have to notify your GP, the bank and your utilities companies. But what about your pension provider?
According to research by the Association of British Insurers (ABI), only one in 25 remembers to get in touch with their pension provider when they move. This can cause people to miss important communications about their pension, making it difficult to reunite a policy-holder with their lost fund.
Tip: If you don’t want to think about updating your address straight away, set up a redirect address with Royal Mail after you move to take some of the pressure off.
The importance of tracing lost pensions
Every penny really does count when it comes to your retirement fund. Currently, there’s a staggering £26.6 billion in lost pension pots in the UK! That’s certainly nothing to scoff at.
Sourcing lost pension plans means you can claim everything you’re entitled to in retirement, giving you the golden years you’ve always wanted — cruise and all 🚢
Finding all your pension policies also gives you an accurate picture of what your retirement could look like down the line, which is key for planning now. You can understand the lifestyle you would have and whether it’s sufficient for your needs and wants in the future.
How do you find a lost pension?
It can be quite frustrating knowing that you have a pension pot somewhere but being unable to locate it. And if you’re not sure if you have a lost pension pot or not, it can’t hurt to check.
Below, we’ve outlined three steps you can take to trace a lost pension.
Step one: Contact the pension provider
If you know which provider your previous pension was with, start your search by getting in touch with them directly. They will ask you for basic information such as your name, address, any previous addresses and your National Insurance (NI) number, which acts as your unique identifier.
Step two: Talk to previous employers
If you can’t remember your pension details, it’s time to go back to your previous employer or their HR team. You might need to provide the dates during which you worked for them and your NI number, so be sure to have this information on hand.
From there, they’ll be able to give you the name of the provider they contributed to when you worked at the company.
Step three: Use the government’s Pension Tracing Service
If you no longer have your old employer’s contact details or the company is no longer operating, the government has a Pension Tracing Service which could help you track down any “missing” pension pots.
The service is free to use and searches a database of over 200,000 pension schemes to find contact details for you.
How to consolidate your pensions with Plum
Once you’ve located all your pensions, the simplest way to ensure they never go missing again is to consolidate them. Pension consolidation means combining multiple pension policies into one pot. By opening a Plum Self-Invested Personal Pension (SIPP), for example, you can pull all your various pensions together and manage your retirement fund from one single place. This means:
- there’s less admin as you only have to deal with one company (Plum);
- it’s easier to check whether you’re on track to meeting your retirement fund goal;
- you can manage everything through the Plum app.
To transfer existing policies into your Plum SIPP, you’ll need a few personal details (like your NI number), the names of your pension providers and the account numbers of your policies.
It’s not the most “fun” experience, but it could help ensure that you never lose a pension pot again. And it doesn’t take long, either!
Please remember that, as with all investing, your capital is at risk. You shouldn’t invest in or deal in any financial product unless you fully understand it and the inherent risks. If you automate and invest you should be satisfied your choices are suitable in light of your circumstances and position.Download Plum
The information contained in this article is for general guidance only and is not intended to constitute investment advice or any other advice or recommendation.