As many as three million households are missing pension cash worth an average of £6,220 each, new figures have revealed. Financial experts at AJ Bell have today revealed the scale of Britain’s lost pension pots epidemic, with more than three million retirement funds now classed as officially lost.
Over-55s hit hardest
Research from the Pensions Policy Institute (PPI) says that new research shows that for over 55s, the situation is even worse, with pensions often worth more than £10,000 going missing.
Tom Selby, director of public policy at finance firm AJ Bell, says that pensions are often lost as people move from employer to employer and lose track of where their automatic enrolment deductions were then going.
Automatic enrolment success story
He said: “Automatic enrolment has been one of the great public policy successes of recent decades, ensuring millions of employees are building at least some level of pension savings for retirement. But as people move jobs throughout their working lives, they often leave old workplace pensions behind, and over time it's easy to lose track of them.
“Policymakers haven’t found any real answers to the challenge of lost pension pots, with Pension Dashboards languishing on the political to-do list for what feels like eons and proposals like ‘pot follows member’ never making meaningful headway.
Government steps fall short
“Steps have been taken by the government to hoover up the smallest pots worth less than £1,000 and consolidate them automatically, but that won’t really address the problem and only means the very smallest accounts being bundled up into a single scheme, which in and of itself won’t bring the saver any closer to a reunion with their forgotten pot.
“The latest Pensions Policy Institute (PPI) research shows this remains a major issue, with more than three million pension pots now considered lost.
“While the average pot value may not sound life-changing on its own, £6,000 can make a significant difference to someone's retirement income. That figure rises to £10,000 among those aged over 55 – people who will likely be thinking about retirement in the not-too-distant future – and that is just an average, meaning many will hold much larger forgotten sums.”
How savers can find lost pots
While work continues on an official government dashboard to track your pensions, savers can use AJ Bell’s own pension locator to snuff out missing money.
Mr Selby added: “Government continues to work on delivering Pension Dashboards, which has the potential to be transformative when it arrives, allowing savers to view all their pension savings in one place. But the Dashboard will be limited and people don't need to wait. Services such as the government's Pension Tracing Service and the pension finding tools available from AJ Bell and other providers can already help reunite people with lost pension pots and make it easier to take charge of retirement savings.”
