Millions of people across the UK could be sitting on unclaimed pension savings worth thousands of pounds, with the average lost pot now estimated at nearly £9,500. Industry figures suggest that around 3.3 million pension pots have gone unclaimed, according to the Pensions Policy Institute (PPI), which values the typical missing pension at £9,470.
Anyone who has worked for multiple employers may be affected, as workers are automatically enrolled into workplace pension schemes each time they start a new eligible job. The simplest way to check for forgotten savings is through the Pension Tracing Service, which helps people reconnect with old workplace pensions. Scottish Widows has now made this service available via its app, allowing customers to search for missing pensions without leaving the platform.
To begin a search, users need to provide details such as the name of a previous employer and the dates they worked there. If known, the pension provider can also be included. Chira Barua, chief executive at Scottish Widows, said: 'Too many people are going into later life without a clear picture of what they have saved, simply because their pensions are scattered across different jobs and providers. With millions of pots sitting unclaimed across the UK, helping people reconnect with their savings is an important first step in improving retirement outcomes.'
Those who discover multiple pensions may consider combining them into a single plan, which could reduce charges. However, experts warn that savers should ensure they are not giving up valuable benefits before transferring any money, particularly if they hold a defined benefit pension that guarantees an income in retirement. For those aged 50 and over, free guidance is available through the Government-backed Pension Wise service.
The need to track down old pensions has grown since automatic enrolment became the norm. Workers contribute 4% of qualifying earnings, employers add 3%, and the Government provides a further 1% via tax relief. Even pensions built up over a short period can continue growing through investment, meaning forgotten savings may now be worth significantly more than expected.
