This year sees the launch of National Pension Tracing Day. The brainchild of financial services group Punter Southall Aspire, it has received support from heavyweights such as Scottish Widows, Aegon, Legal and General and Standard Life. Encouraging people to use the extra hour when the clocks go back to trace missing pensions, this clever marketing gimmick is receiving industrywide coverage.
How many pension pots are missing?
Data provided by the Association of British Insurers (ABI) suggests there are 1.6 million unclaimed pension pots worth a staggering £19.4 billion. Furthermore, it is believed that by 2050 we could see more than 50 million pension pots unclaimed!
Surprising statistics on missing pension pots
Many people will be astounded at the number of pensions that have "gone astray" despite a government pension tracing service. There are various reasons for this, but the main issue seems to be people moving house but not informing their pension provider. On average, people will:
- Change employment 11 times
- Move home eight times
When it comes to combining pension funds, research from Scottish Widows gives a fascinating insight:
- One in 10 people have no idea how to integrate their pension funds
- 12% fail to do so because it is “too much hassle”
- 44% of people have not even tried to trace missing pensions
A report by Legal and General also cast a disappointing light on personal pension fund administration in the UK:
- More than 50% of savers had two or more pension pots
- But only 17% had consolidated their pension assets
There is no excuse when you consider that personal details can now be changed with a simple email and scanned evidence of your move.
Government pension tracing service
The current challenges regarding lost pension pots highlight a lack of communication between the government/pension industry and pension members. Many people may not even be aware there is a UK government pension tracing service available online. A recent survey carried out by Legal and General suggested that:
- 32% of those who used the government service did not have the correct details
- 16% found it too complicated
On the flip side, 52% of those questioned do not appear to have had any concerns about the government-backed pension tracing service.
What next, after you discover missing pension funds?
Even though the UK government has attempted to simplify the pension industry, it is still essential to take professional advice. Consequently, whether you require assistance tracing missing pensions or you have discovered previously lost funds, your pension adviser will be able to assist. Whether you can combine them under one umbrella will depend upon the nature of the funds and the options available.
In a worst-case scenario, once you have updated your details, you will receive regular annual updates from your pension providers.
Strong support for National Pension Tracing Day
There’s no doubt that the National Pension Tracing Day movement is growing stronger, assisted by industry heavyweights joining the cause. Many will be surprised that so many pension funds seem to have "gone astray". However, this is an issue that can be resolved. Using your extra hour on 31st October 2021 to check your records is akin to a treasure hunt, one which could be relatively lucrative.
