The £26 Billion Lost Pension Maze

Unclaimed Pensions Could Mean Thousands Of Pounds Added To Your Retirement Fund

Navigating the world of pensions can be challenging, particularly when you’ve participated in various schemes or shifted jobs throughout your working life. Pension plans may close, merge or change names as time progresses, adding to the complexity. It might have been rebranded even if you recall your scheme’s original name.

In our varied careers, it’s common to accumulate multiple pensions from different jobs. It’s easy for some of these to slip through the cracks, especially when moving house and changing addresses. Ensuring you know all your pension schemes is essential to maximise your retirement benefits. Asserting your claim over your pension is crucial – the earlier you locate a misplaced one, the more beneficial it will be.

With £26 billion in lost pensions in 2022 worth an average of £9,500[1], it’s well worth seeing if some belong to you. If you suspect you have a lost pension, your first port of call should be your previous pension provider. The government’s Pension Tracing Service is available if their identity eludes you. This service provides current contact details for your pension scheme, helping you keep track of your retirement funds.

Reflection on employment history

Reflect on every job you’ve held since leaving education. Each employment stint possibly came with a workplace pension. Look for old pension statements. These documents will provide valuable information about your past pension schemes.

Contacting your previous pension provider

Knowing your old pension provider simplifies the task. Contact them armed with as much information as possible to facilitate the reunion with your pension savings. Essential details include your plan number (if available), date of birth and National Insurance number.

Utilising the Pension Tracing Service

The government’s free Pension Tracing Service can assist if you suspect a missing pension but lack any supporting information. Visit their gov.uk website or phone them at 0345 600 2537. If you remember your old employer’s name or the pension company, the service will provide up-to-date contact details.

Understanding the role of pension administrators

It’s worth noting that the Pension Tracing Service provides only the pension administrator’s contact details. It won’t disclose whether you have a pension or its value. You will need to contact the pension administrator directly to confirm your pension status and worth.

Recognising potential pitfalls

Remember, possessing pension paperwork doesn’t necessarily equate to a pension entitlement. You may have received a refund of your contributions upon leaving an employer, or certain older workplace pensions require a minimum membership period before entitlement.

Beware of scammers

Scammers also look to exploit the subject of pension transfers with offers to access your pension early, which may be called ‘pension liberation’ or a ‘pension loan’, as the scammers often claim you can borrow money from your pension fund. If someone accepts the offer, their pension funds will typically be transferred into a scheme set up by the scam, often based abroad.

Source data:
[1] ‘Lost Pensions 2022: What’s the scale and impact?’, PPI Briefing Note Number 134, Pensions Policy Institute, October 2022.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).

THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.