29th May 2015
The number of people searching for lost pensions has tripled over the past decade as people move from job to job and lose track of their savings.
Figures requested by insurer LV= from the Pension Tracing Service show the number of people searching for lost savings has increased by almost 250% since 2005.
And LV= believes this figure will increase as today’s workforce becomes more transient. The average worker today is expected to take nine jobs over their lifetime, twice as many as the previous generation.
Workers have, on average, two workplace pensions but one in five have already saved into three or more. Fewer than one in three have decided to combine these multiple pots meaning many forget about older pots over time and miss out on additional retirement income in later life.
LV= believe one in 10 workers will miss out on pension savings because they believe that if they leave a job they cannot claim the savings they made. For younger people, aged 18 to 34, this misconception rises to one in five.
Younger workers are also more likely to move jobs, meaning they could be leaving behind various pots of money that they do not believe they can take with them.
The problem will be somewhat addressed from next year when new legislation will mean pots automatically follow workers.
John Perks, managing director of LV= retirement solutions, said: ‘With today’s workers likely to take up roles at numerous employers throughout their lives, many could find themselves missing out on a substantial amount of pension savings if they lose track of their pots.
‘Although people don’t lose the right to claim their pension if they move jobs, it is worth considering whether it makes sense for them to put all their funds into one place. This removes the chance of someone forgetting or losing track of a pension pot they have saved into and may reduce the charges they pay on their savings. It could also improve workers’ awareness of the value of their pensions so they are able to make the most of it when they come to retirement.’