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Brits ‘risk losing track’ of pensions

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Around two in five Brits have at least three different pension pots, including their state pension, a new study by pension app firm mypensionID has revealed

The survey of 2,000 people found that one in five men had five or more pension posts, compared to just one in 10 women. What’s more, workers in the capital were particularly likely to have accumulated a wide number of distinct pension pots, with 22.5% Londoners boasting at least five pensions.

People aged 35-44 were the most likely to have upwards of five pensions in place (18%), though it was the younger group of under 24s who were the most likely to have lost track of their pensions.

Lisa Lyon, founder of mypensionID commented: “The average Briton has at least six jobs in their lifetime which, since the introduction of auto-enrolment, means that they will accumulate a pension benefit at every new employer, meaning a lot of administration for that individual as they move through their career keeping track of them all. Ultimately many people lose track of previous schemes and funds they have paid into.”

The study follows recent research which revealed that significant numbers of us overestimate the value of the state pension we can expect to receive.

The risk of too many pensions

The government’s auto-enrolment scheme is a big contributor to the issue. 

Employers are required to open a pension on behalf of qualifying staff, and contribute to it, and it’s proven incredibly successful at boosting the amounts workers have set aside in their pensions. According to a study from the Institute for Fiscal Studies (IFS), a massive 90% of eligible private sector employees are now members of a workplace pension scheme.

However, as we move between jobs and new pensions are opened in our name, it does increase the risk of confusion over how many pension pots we have and our overall pension saving position. 

Having so many pensions open at once can also threaten the size of our eventual pension pots, as the amounts saved in pensions which we are no longer contributing to is slowly eroded away by ongoing charges.

The pension dashboard

The government wants to see a full pension dashboard launched, which will give individual savers a full breakdown of the various pensions in their name, and what they are worth. 

The launch of the dashboard was included in the Pension Schemes Bill, which gained royal assent last week, though progress on getting the dashboard live remains extremely slow with the dashboard unlikely to be in place until 2023.

There are also concerns that even when it does go live, it will only include six in 10 pensions.

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