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A recent study by Profile Pensions revealed a quarter of adults think they’ve lost track of a pension along the way. Lost pensions mean you’re not getting the full picture in your retirement planning!
Here’s how to trace lost pensions and other missing money you might have forgotten about. You could have thousands of pounds to claim!
As you move jobs, it’s easy to set up a new pension scheme with your new employer. When this has happened several times over your career, your older pension schemes could fall by the wayside.
It’s easier now than ever before to lose track of workplace pensions as employers are obliged to auto-enrol most new employees. When you’ve moved jobs lots of times in your career, juggling your various pension statements gets confusing.
This happens especially when you’ve moved home a lot, too! Pensions are easily forgotten on the ‘must update my address’ list when you relocate – so your letters and details never get forwarded to your current home.
Not only does not updating your address mean you could forget about your pension, it opens you up to fraud, too. Make sure if you move home that you use Royal Mail’s Redirection Service (ideally for a year, to catch those annual statement letters). This helps minimise the risk of fraud – and reminds you who needs your new address!
The good news is that the Government recognises how many people have lost track of their various pension schemes over the years. So, they set up the Pension Tracing Service.
This service won’t tell you IF you have a pension with a provider, or how much is in it. However, it will help you find the pension provider you need to contact to find out if you have a pension with them.
Even if your employer – or pension provider – doesn’t exist anymore, this is a good starting point. You’ll need to know your employer’s name or the name of the pension provider you’re looking for.
If you know you have a pension with a company or provider that no longer exists (or may have merged years ago with another organisation), get in touch with the Pensions Advisory Service. This is a free service funded by the Government to help you trace your pensions and make the most of your potential retirement income.
When you’ve located your old pensions, you could be surprised at how much money you’ve recovered in time for your retirement.
However, make sure you check your pension scheme fees. If you’ve left a forgotten pension for years and years, the annual costs of the scheme could be eating into your pension pot (especially as you’ve not made further contributions since it became lost).
Check the transfer fees of your scheme, too. It could seem expensive to move your pension – but if you’re consolidating to a scheme with much lower running costs, it could save you a huge chunk of cash in the longer term.
It’s not always best to consolidate everything into one pension pot. However, if you have half a dozen pensions or more, it’s worth looking at moving some pots into one – if only to save on fees. As with any investments, diversification helps protect your financial future. So, having more than one pension could benefit you (especially if you choose different investment and risk types for each pot).
Not sure what do to with your rediscovered pension pot?
When you’ve assessed your pension situation – and found lost accounts – you might need to reconsider your retirement plans. The best way to do this is by speaking to a financial advisor.
This does cost money – but will save you (or even make you!) so much cash in return, it’s definitely worth the investment, especially if you’ve never sought independent financial advice before.
Get a free financial health check with VouchedFor here.
You’ve seen how easy it is to have a lost pension – what about other money?
Lost bank accounts and NS&I bonds could be sitting around gathering dust! In fact, around £850 million is sitting in unused accounts right now. Those that have been dormant over 15 years now fund a Government initiative, the Dormant Accounts Scheme, to support good causes. (If you find a very old account, don’t worry – you can still get your money back).
My Lost Account is a free service that helps people track their lost bank accounts and bonds. You need to register with your personal details first – this helps the service find your lost accounts.
With around half a million lost accounts in the UK, it can take a while for the service to return results. Be prepared to wait around 3 months for My Lost Account to come up with information for you.
Of course, the service needs to protect money in lost accounts until they can confirm it’s really your money. So, if your search reveals a lost account with cash in it, you’ll need to fill out some information to prove your identity.
Once this is done, your account is reopened and you can access the cash. If it’s an interest-bearing account, you’ll also receive all the compound interest you’re entitled to!
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Good advice for finding lost pensions.