Did you know that 31st October is National Pension Tracing Day?
On the day the clocks go back, people are being urged to use the additional hour to track down their lost and missing pensions.
With an estimated £19.4 billion of pension pots ‘missing’ in the UK, there are 1.6 million pension pots to reunite with their rightful owners.
Looking at small pension pots, new research from insurer Aegon has found that a quarter of adults have at least one pension pot of less than £5,000.
15% of adults don’t know if they have a small pension pot or not.
The research also asked whether people have combined multiple small pension pots into one, finding that 58% of adults have never consolidated their pensions.
39% of respondents said they had moved some or all of their pensions together.
There are more small pension pots than ever before due to the changing nature of the jobs market and the introduction of pension auto-enrolment.
Because workplace pensions do not typically follow you between jobs, people are more likely to accumulate several pension pots throughout their careers.
Some estimates suggest that people move jobs an average of 10 times during their working life.
Pension consolidation is one approach towards solving the issue of ‘missing’ pension pots, as it can be easier to keep track of one pension plan.
The research found that common reasons preventing people from consolidating their pension pots included not wanting all of their eggs in one basket.
Kate Smith, Head of Pensions at Aegon, said:
“Auto-enrolment and a fluid UK labour market has led to a significant increase in the number of small pension pots people accumulate in their working lives. Eligible employees are enrolled into a new workplace pension scheme when they move employers and generally stop contributions to any old pension.
“Having multiple pensions can make it difficult for people to keep track of their savings and provides challenges when understanding the full value of their retirement savings.
“Bringing these pots together is the simplest way to keep track of pension savings, but Aegon’s research shows well over half of adults have never done this. This isn’t surprising given the low level of pension engagement and understanding in this area.
“Other benefits of consolidating small pension pots include the potential to receive lower charges and access to helpful retirement planning tools which many modern schemes now provide.”
If you think you might have missing pension pots from earlier in your life, you can use the resources on the National Pension Tracing Day website at nationalpensiontracingday.co.uk.