Pension Tracing Service on track for record calls

13 November 2024

The Pension Tracing Service is set for a record-breaking year, as the volume of enquiries about lost pensions continues to rise. 

Data from a freedom of information request submitted by Hargreaves Lansdown reveals that the service received 31,505 calls between January 1 and May 24 of this year, indicating it may surpass the previous record of 63,381 calls in 2023.

Since January 2019, the Pension Tracing Service has handled over 276,000 calls, with demand steadily increasing. Yet Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, believes this figure represents only a fraction of the overall problem. 

Research from the Pensions Policy Institute estimates that approximately 2.8 million pension pots remain unclaimed.

Morrissey highlighted the importance of spending just one hour to trace lost pensions, saying: “It’s a move that could have a truly transformative effect on your retirement and could be an hour very well spent."

Recent findings from Hargreaves Lansdown also reveal that 59% of the 1,200 people surveyed have two or more pensions. Changing jobs throughout a career often leads people to lose track of pensions accumulated in previous roles.

Helen Morrissey also noted how tracking down lost pensions can open opportunities for savers to consider other potentially beneficial options, adding: “Once you’ve tracked down your pensions, it might make sense to consolidate them. This can cut down on time and admin and will give you a much clearer idea of how much you have, so you can plan with more certainty.” 

However, she also advised caution. Some pensions impose hefty exit fees on transfers, and valuable benefits, like guaranteed annuity rates, might be forfeited. “It’s also worth saying that it rarely makes sense to move a defined benefit pension,” Morrissey said. “Take advice or guidance as necessary to make sure you come to the right decision for you.”

While auto-enrolment has encouraged more people to save, Morrissey pointed out that as people switch jobs, they often forget to update contact information, increasing the risk of losing track of old pension accounts.

Source:

Volume of enquiries about lost pensions continues to rise: Demand for pension tracing service grows. FT Adviser. Accessed 11 November 2024.