Written by Retirement Line
Last Updated: 17th January 2024
A surprising number of people approaching retirement have lost track of their pensions over the years. It’s left billions of pounds in valuable retirement funds unclaimed. Here’s how – and why – you should check for your lost or forgotten pension funds.
The Pensions Policy Institute (PPI) carried out a study which revealed that over 2.8 million pension pots are considered lost – an increase of 75% over the last four years. To help reunite UK pension savers with their money, the PPI is encouraging people to take action to trace their lost pension pots worth a total of £26.6 billion.
In this guide, we'll explore the importance of searching for lost pensions, particularly as you approach retirement, and how to track them down.
For those of us approaching retirement or already enjoying it, every penny counts. When people change jobs, move house, retire, or if their employers undergo mergers or restructure, pension plans can get lost. This means you might have money sitting in a forgotten pension account that could enhance your retirement savings.
By taking the time to trace your old pension pots, no matter how small, the collective funds could provide you with a financial boost in retirement – or fund some long-awaited retirement adventures!
If you have one or more lost pension pots then you won’t be keeping an eye on how your money in them is being invested. As some people approach retirement, they take a lower-risk strategy with their investments to protect their money. This is known as ‘lifestyling’.
In its simplest terms, lifestyling means gradually moving your pension funds from riskier, higher-growth assets, such as shares, into lower-risk assets. Whilst this means that your money has a lower potential of returns, you have a better chance of protecting your nest egg. This helps to ensure it doesn’t fall in value just before you retire.
Once you find your lost pensions, you’ll be able to keep a close eye on their performance until you’re ready to access your money by purchasing an annuity, for example.
By putting in the time now to trace your old pensions, you can make the process of retirement much smoother and hassle-free. Once you have found all your old pension pots, you may even choose to consolidate them into one easy-to-manage pension fund.
There are a number of potential benefits to consolidating your pension funds. Having one larger pot can make it easier for you to keep an eye on how your investments are performing. In addition, if you choose an annuity for some or all of your retirement income, you might achieve better rates and income if you have one larger fund to fund your annuity purchase.
Consolidation isn’t for everyone, however. For example, you may have pension savings in a scheme with valuable benefits that would be lost if you transfer them to another scheme. The government-backed Money Helper website has useful information about consolidation. You may also wish to seek specialist guidance or advice before making a decision.
It’s easy to put financial tasks such as these off for another day, but consider what happens should something happen to you. The responsibility might fall to your family to locate and claim your untraced funds. It could be particularly challenging for them to access these pension pots if you are no longer around.
By proactively searching for lost pensions, you can simplify the financial affairs of your estate, ensuring your family faces fewer challenges at an already difficult time.
Tracing lost pensions can be a straightforward process today thanks to the services available in the UK specifically designed to assist you.
Most pension schemes do send a statement each year so it’s worth checking through your document files, drawers or anywhere else you might store important paperwork. If you can find anything with the name of your employer or pension scheme then this will give you a good starting point.
If you no longer get any pension statements, perhaps because you have moved house at some point without updating your scheme provider, then you can contact:
Your pension provider. If you know the name of your provider but are not receiving your annual statements then contact them to update your details and request a pension statement.
Before you contact them, it would be helpful to have your plan number, your date of birth, your National Insurance number and the date your pension was set up.
Your former employer. If you have a workplace pension but cannot remember the scheme provider then contacting your former employer should help you to trace it.
Having the following details to hand when you speak to the HR department will help: your date of birth, your National Insurance number, when you worked there and when the pension was set up.
The Pension Tracing Service. If you don’t know the details of your pension scheme/s and cannot get in touch with your previous employer then you can use the Pension Tracing Service. This is a free government service that searches a database of more than 200,000 workplace and personal pension schemes to reconnect savers with their money.
By actively searching for lost pensions, you can trace unclaimed money, simplify your estate's financial affairs and keep a closer eye on how your money is invested. You might even find that the extra money sees you enjoying a higher retirement income for life.
Don't let your hard-earned retirement savings slip through the cracks. Start the search for your lost pensions today… your future self will thank you!
Remember, after tracing your old pension schemes you can use our free online tool to find out how much retirement income you could achieve from your pension fund.
Call now and talk to an Annuity Specialist about how we can boost your annuity income in retirement0800 652 1316