Millions of pension pots are at risk of being lost as Britons’ staggering lack of knowledge could lead them sleepwalking into retirement poverty, says Which? Yet the Pension Policy Institute revealed late last year that the value of lost pension pots had increased by £7billion in four years to reach £26.6billion.
That’s a pension pot loss of £9,470 per person, on average. Nearly half of the savers who took part in the Which? survey do not know how many pension pots they have.
And only 31 percent know how much their pension is worth.
Experts now fear the country’s pension illiteracy could lead to the loss of serious amounts of cash.
Sam Richardson, Which? Money Deputy Editor, said: “The cost-of-living crisis has made it harder for retirees and those about to retire to make ends meet.
“It’s therefore vital they’re aware of any retirement savings they might have lost track of over the years, which could make all the difference to their finances.”
Yvonne Braun, of the Association of British Insurers, said: “The amount of money in lost pension pots has increased by 37 percent to £26.6billion in recent years, with people missing out on money that can make a real difference to their life.
“It’s time to pay your pension some attention and use the resources available to track down any lost pots.”
Research from career experts at Zippia suggests the average worker will have 12 jobs in their lifetime, which makes it “easy to lose track” of pensions, former pensions minister and partner at consultants LCP, Steve Webb, said.
He said: “But a missing pension pot can be worth hundreds, thousands or tens of thousands of pounds. Make sure you keep any pension paperwork so you know who to contact if you need to track it down.
“With so many of us not saving enough for retirement as it is, making sure we do not lose track of the pensions we do have is vital.”
Another way to track down a lost pension, as suggested by Which? is by using the Pension Tracing Service.
Despite its effectiveness and ease, the watchdog’s research found just under four in 10 people had not heard of it.
The free service run by the Government has an online database of more than 320,000 pension scheme administrators.
All you will need is the name of an employer or a pension provider to use the service which navigates the maze of firms which have changed their name or been taken over. Which? is calling for a pensions dashboard to show people all of their pensions in one place.
Former Pensions Minister Baroness Ros Altmann said: “The state pension is very low, so having private pension money can give you a better lifestyle.
“I hope pension companies find better ways to trace lost customers, rather than sitting on the money and taking charges every year.”
