As well as National Black Cat Day, 27 October also marks National Pension Tracing Day.
The annual event encourages UK workers to find their misplaced or unclaimed pensions. And with more than £26 billion currently sat in “lost” retirement funds, it’s an exercise that could prove worthwhile.
Keep reading for seven surprising facts and top tips to encourage you to find your missing paperwork and re-engage with your forgotten pension wealth this National Pension Tracing Day.
1. More than £26 billion currently sits in “lost” pension pots
The Pension Policy Institute reported back in 2022, that the value of unclaimed UK pension pots amounted to around £26.6 billion. This was on top of the wealth that sat in dormant savings accounts and non-pension investments.
Two main causes for pensions being lost were:
- Changing jobs and ceasing to contribute
- Moving house and not providing a new address.
In the upheaval of a house move or a job change, it can be difficult to stay focused on financial housekeeping tasks. Keeping on top of paperwork is vital, though, and you’ll reap the benefits further down the line.
2. As many as 1 in 20 of us could have a pension that we don’t know about
Traditionally, post-education employment meant a “job for life”. More recently, this has ceased to be the case.
In fact, it’s now estimated that UK workers will have as many as 12 different jobs during their careers, and this could mean 12 different pension pots. Keeping track of these can be difficult.
Cast your mind back to previous jobs you’ve held and try to remember if they had a pension attached. If so, have you got the paperwork?
3. You can use the government website to trace your lost pensions
The government’s website features a Pension Tracing Service to help you track your lost pensions and find contact details for pension schemes and providers.
You’ll need to provide as much detail as possible, so think back over your career and try to match previous jobs to the pensions they provided. Search your paperwork to match the pension to the provider but remember, some schemes might have changed name or been taken over by new companies.
This process can be time-consuming but once completed, you’ll have a full picture of your retirement funds and be in a great position to make well-informed choices.
4. Finding lost pensions now can reduce stress later on
Once you’ve filled in all the gaps in your pension history, you can contact all of your providers for current fund values, as well as details of fees, management charges, and available fund choices.
Keep all of this information together so that it’s easy to find when you need it. This can save you time and reduce stress as your retirement date nears.
5. Older plans might have higher charges or less flexibility so consider consolidation
You might find that some of your older plans have higher charges, limited fund choice, or lack flexibility compared to more modern pensions.
You might want to look into ESG (environmental, social, and governance) funds that align with your values on sustainability issues, for example. Or you might enjoy the 24/7 access to your funds that online portals provide.
One option might be to consolidate your smaller, older pots into one scheme that provides the flexibility and secure online access you need.
You might also be able to consolidate into the scheme with the lowest charges, helping to save you money and grow your fund more quickly.
6. There are potential downsides to consolidation that will need to be factored in
Before you decide to consolidate, you’ll need to complete certain checks:
- Look for potential charges that might outweigh the benefits of a transfer
- Older schemes can have valuable benefits attached, like guaranteed rates or generous death benefits, so find out if these will be lost
- Consider the tax implications of a larger pot when the time comes to withdraw funds.
Consolidation won’t be right for everyone so always speak to the experts before you make a decision.
7. Always seek advice as retirement decisions can have long-lasting implications
Finding your lost pensions this National Pension Tracing Day could help you to re-engage with your retirement, but that doesn’t mean you should rush into retirement decisions.
Speak Globe IFA and we can help you factor in any additional pension amounts you find. You might be able to retire earlier, live a more comfortable lifestyle, or leave your wealth to loved ones so seeking expert advice is crucial.
Get in touch
Please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you factor “lost” pensions into your long-term retirement plans.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. Workplace pensions are regulated by The Pension Regulator.
