Believe it or not, there is an estimated £19.4bn worth of pensions currently lost or forgotten. That’s right, almost 20 billion Great British Pounds floating in the ether, waiting to be claimed. If you trace your pensions, you may find that some of it could be yours!
Millions of people are at risk of missing out on a more secure retirement because of this. Needless to say, there are multiple benefits to tracing lost and forgotten pensions.
The first ever Pension Tracing Day, which took place on 31st October of this year, has spurred many people to take the time to track down any missing pension pots, and investigate their personal finances.
Leading online pension provider PensionBee offer a range of tips surrounding how to trace your lost pensions. They have a list of actions you can take if you want to take control of any lost or miscellaneous pension pots you may have accrued during your working life.
- Why should you trace your pensions?
- How to trace old pensions
- How to contact your pension provider
- Consolidating and combining your pension pots
- What the experts are saying
The benefits of tracing your pensions include potential financial gain, as well as ease of access in the future and during retirement. You could be missing out on thousands of pounds, both through a loss of compound interest on this money, or by paying high fees you didn’t know you were paying.
It can be harder to trace pensions if you have switched employers or moved home multiple times and have forgotten to notify your pension provider each time.
There are a number of ways in which you can begin to trace your old pensions. According to PensionBee, if you don’t have a recent pension statement, the best way to start your research is to contact your pension provider, if you know who they are. This will enable you to find out your current pension value and any additional benefits you may be entitled to.
If you cannot remember who your pension provider is, contact your former employers to find out about your old workplace pensions. They should be able to inform you of who your provider is.
If you can’t reach your previous employer for any reason, you can try the Pension Tracing Service. The Pension Tracing Service is a database of pension providers which allows you to search your employer’s name and see if there’s a record of your pension provider. This is a free service provided by the UK Government.
Another place to start, is by following the paper trails you have access to. Look through any paperwork you have filed away, as well as any old emails you may have access to. You may find communications from your pension providers which will help you trace any pension pots you may have forgotten about.
Similarly, going over your employment history may offer insight into your previous pension schemes and providers. Old employment contracts, payslips and documents could give reference to pension deductions and scheme providers.
When you have gathered information about your current or previous pension providers, you can begin to contact them. Make sure you have as much information as possible to hand, such as your date of birth and national insurance number.
Having an estimate of when your previous plans were set up and any policy numbers is also extremely helpful. You are entitled to ask any questions you wish, provided you have passed the security checks. Asking about the current value of your pension pot is a good question to start with.
You may also wish to discuss what your current scheme offers in terms of benefits, whether there are any deductions or charges as the result of management fees and who the nominated beneficiary is in the instance of death. If you are interested in moving your pension, it’s a good idea to ask if there are any exit fees associated with doing this.
Of course, asking the age at which you will have access to your pension is a key piece of information you should be aware of. Unless you meet strict criteria, most people can’t access their pensions until the age of 55, rising to 57 from 2028.
In most cases PensionBee can help savers combine their pensions into one plan with a few personal details. They’ll ask for some basic information from you to begin with, such as your address, national insurance number and date of birth, as well as the name of your old pension provider and your policy number, if you have it to hand.
The more information you are able to provide, the faster they will be able to find and combine your pensions.
Consolidating your pensions into one pot can be beneficial, as it enables you to see all of your retirement savings in one place, so you can work out if you’re on the right track, or if you’ll need to increase your contributions to reach your retirement goals. It also gives you the opportunity to do your research and move all your pension pots to one provider with lower fees, or one that better fits your values or investment needs.
However, before you move or combine your pension pots, it is essential that you check you will not lose any special benefits you may be entitled to if you transfer. Such benefits include guaranteed annuity rate.
James Andrews, personal finance expert at money.co.uk, says:
“When planning for the future, it is important to stay on top of your savings, including where your pensions are being held. Taking time to track down old pots can be invaluable to your future retirement prospects.
“That’s because there might be changes since you last looked at them in where the money is being held as well as differences in management fees. Considering you can transfer money between registered pension schemes and keep all your tax benefits, it makes little sense to have some savings being charged higher fees than others.
“It’s also good to know what your money is invested in – so having all your savings in one place will make life far simpler to both check up on funds as well as move your cash where you want it to be.
“The government’s Pension Tracing Service is a great tool to use if you have exhausted all other avenues and it is entirely free to use. By using this tool and undergoing research of your own, you should be in the best position to track down your idle pension pots and in turn, provide more options for your future retirement.”
Overall, the imperative thing is to know where your retirement savings are located and to keep an eye on your accounts. When you have a handle on your pension pots, whether that be a consolidated pot or multiple accounts, remember to monitor the performance of your investments and check how much you’re paying in fees regularly.
Make sure you tell your provider about any new jobs or changes to your address. Most importantly, continue your ongoing contributions in order to set yourself up for retirement!
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Capital at risk.