Only one in five workers are aware they can consolidate their pension contributions, creating £26.6bn in lost payments.
Of those who haven’t consolidated, a quarter of respondents to Standard Life’s survey said it was down to not knowing how to do it.
Further, more than one in ten (12%) are only vaguely aware of the option to consolidate, while 21% have heard about it but not in any detail – there were only 20% of the 6,350 surveyed who are fully aware of what pension consolidation is.
The annual retirement report coincided with National Pension Tracing Day on 29 October, which aimed to raise awareness with workers about about what’s happening with their pension.
It comes after YourMoney.com reported a separate study which found one in four workers were unaware of what was going towards their retirement fund – rising to a third among 55 year olds.
Tracking pension ‘not as difficult as you think’
Dean Butler, managing director at Standard Life, part of Phoenix Group said: “Throughout a career it’s easy to collect several different pensions, but as they build up it can become much harder to keep on top of them. Life gets in the way and when you move house or change jobs your pension is unlikely to be top of your agenda and can easily be forgotten about.
“Tracking them down is not as difficult as you think and a good first step is to use the Government’s Pension Tracing Service. Consider taking the extra hour [now clocks have gone back] to begin your pension tracing quest. It can provide greater certainty for the future knowing where all your pensions are and how much they are worth, so it could be the most financially rewarding hour you’ll ever spend!
“The next step is to decide what to do with your various pensions. Consolidating them into one single pension plan can enable you to take advantage of less admin and filing, make it easier to track performance and boost your understanding of how much you are saving for the future, as well as potentially result in you paying lower charges. However, it’s important to understand your circumstances first, and it’s worth seeking guidance or advice to make sure this is the right thing for you before making any decisions.”
