A quarter of workers think they have lost a pension plan as part of the nation’s £26.6bn black hole, research reveals.
There were a further fifth (18%) of the 2,000 people surveyed by Hargreaves Lansdown who were unsure what was happening with their contributions.
Additionally, Aegon UK found an estimated 2.8 million pension pots are going untraced, at an average of around £9,500 in each plan. This means the UK is missing out on £26.6bn ahead of retirement.
The spotlight into this costly issue comes ahead of the third annual National Pension Tracing Day on 29 October, which aims to encourage people into reclaiming their lost pension payments.
In 2021, there were plans set out by the Department for Work and Pensions’ (DWP) to connect all schemes for employees in a digital ‘dashboard’. But, due to technical issues this legislation was pushed back to October 2026 and the Government has been urged to speed up the process.
‘Lost pension scandal must become a thing of a past’
Kate Smith, head of pensions at Aegon, said: “We are calling on the UK Government to deliver the guidance needed by pension providers to help deliver the long-promised UK pension dashboard. The pension dashboard will enable people to see all their pensions online, securely, in one place. Once up and running, people should never again lose track of their old pensions.
“The £26.6bn scandal of lost pensions must become a thing of the past, every penny saved counts, particularly as families struggle through the cost-of-living crisis.
“In the meantime, the industry can look to further help workers get into the habit of taking their pension to their new employer’s workplace scheme as they move jobs. It’s all too easy to undervalue or lose track of small pension pots, combining them into a workplace pension scheme not only makes them easier to manage, but also shines the light on how much has been saved.”
‘Workers could be missing out on thousands of pounds’
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, wrote: “Most of us will have several jobs over the course of our working lives and auto-enrolment means we could have a pension in every one of them. As time passes, we may move house, contact details get lost and we lose track of a pension.
“This potentially has major implications for our retirement income. The pension may only be small but over time it will grow, and you could be missing out on thousands of pounds that could contribute towards your pension income.”
The investment provider has pitched in with tips for people who have lost track of their pension plans.
How to trace your pension
- Make a list of everywhere you have worked during your career so far and check to see if you have pension paperwork for all of them.
- Talk to any old colleagues to see whether they kept any of the paperwork.
- If you have lost details of an old pension scheme, contact the Government’s tracing service on Find pension contact details – GOV.UK (www.gov.uk). It won’t tell you how much is in the pension, but it will help you find contact details or you can call the Tracing Service on 0800 731 0193 from Monday to Friday, 8am to 6pm.
- Whenever you move home, add the pension providers to the list of people you need to notify so they have up to date contact details for you and you don’t miss out on important communications.
- If you have accumulated several different pensions over your working life – you could consider consolidating them. This can help you have a much clearer idea of how much you have, so you can plan with more certainty. But bear in mind that some pensions might operate expensive exit fees if you transfer, so get advice ahead of making your decision.
