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Over one-fifth have lost pension pot

Over one-fifth have lost pension pot

Category: Pensions
Author: Lieke Braadbaart
Date: 30/05/2018

The latest research from Aegon has revealed that of the 64% of people who have multiple pension pots, 22% have lost track of at least one of their retirement savings pots. Worryingly, this number has increased slightly from October 2016, when Aegon last ran this survey.

It's understandable that the number of people with multiple pensions has increased, from 62% in the last survey to 64% according to the most recent findings. After all, it's becoming less and less common for workers to stay in the same job throughout their entire employment history. Indeed, the findings show that we are moving towards a world wherein people have an average of 11 jobs in their career.

This means potentially a lot of different pots of retirement savings, and many opportunities to lose one along the way. However, with the increased emphasis on private pensions – exemplified by automatic enrolment – it's still worrying that now more than 7 million people have misplaced some or even all of their pension pots.

This is also despite the finding that there has been an increase in pension awareness, with 30% not knowing the value of their pensions, down from 39% previously. This is important knowledge, as "Without the bigger picture people might be setting themselves up for a retirement fall without a clear idea of what their savings are worth," Kate Smith, head of Pensions at Aegon, said.

One way to get a better idea of your various pension pots is by consolidating them all into one pot, yet only 27% of survey respondents were interested in this option. Many (46%) were worried about putting all their eggs in one basket, while some (27%) didn't know the benefits of doing so, or simply didn't want to pay for an adviser to guide them through the process (also 27%).

"Pension consolidation won't be right for everyone, [and] there are merits to not keeping all your eggs in one basket," Kate acknowledged. Additionally, "some older style pensions will have valuable benefits which may be lost on transfer." However, "it's notoriously difficult for people to keep track of small pension pots, particularly at the beginning of someone's working life. Consolidation of small auto-enrolment pots along the way will help people keep track of these."

So, a few pots may be a manageable amount, and even smart, but too many different small pots and you could lose oversight, as well as some benefits of having a larger pot invested in the right funds.

What next?

If you think you're missing a pot, the Department for Work and Pensions has a Pension Tracker you can use to hunt your retirement savings down.

Not sure what to do with your various savings pots? You could read our guides to get a better understanding of your options. Or, especially for those nearing retirement, you could consider talking to an annuity specialist.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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