Almost nine out of ten workers in the UK has at least one lost or “stranded” pension pot, according to new research from wealth manager Netwealth. Among those employees who have lost track of a pension, some 42% say that they have between two and five stranded pots.
The average amount locked up in lost pensions per employee is some £28,000.
Charlotte Ransom, CEO of Netwealth, said that with the cost-of-living crisis continuing to impact people’s lives, this is one way to optimise savings. “Now more than ever, it is vital that consumers track down any stranded pensions that they have worked hard to earn, and that they act to recover them sooner rather than later.”
The fact that employees change jobs multiple times throughout their career means many will pay into a series of pension pots over their lifetime – and responsibility for keeping tabs on them falls to the individual.
According to Charlotte Ransom, the current pensions saving system prevents consumers from having a “holistic view” across their wealth in aggregate, making it more difficult to plan ahead and to identify the funds that will be needed for key milestones.
“The high number of stranded assets is clearly concerning,” said Ransom. “It is very common to have several pools of retirement assets during our lifetime, and it is often difficult to successfully and actively track all of them, especially if they are sitting with multiple providers over a long period of time.”
Gender gap
The research also found that female employees were particularly affected, with 50% of those who have an unclaimed pension pot saying that they do not have sight of, or access to, up to five company pensions that they have built up over their working life.
Ms Ransom is urged workplace savers to take control of all their pension assets. “It is understandable that in the current climate of market volatility and the cost-of-living crisis, there is a growing fear among investors that their savings won’t go far enough in later life, especially with average lifetimes extending, requiring more substantial retirement savings,” she said.
Helpful places to start tracking down a lost pension:
The People’s Pension website: https://thepeoplespension.co.uk/how-do-i-find-a-lost-pension/
DWP website: https://www.gov.uk/government/news/new-pension-tracing-service-website-launched
Are YOU on target for a comfortable retirement?
If you want to find out exactly how well your retirement financial plans are faring, simply check in with the RetireEasy LifePlan online tool. Feed in your current savings and investments and you will be able to see at a glance in easy-to-understand graphs exactly how much you can comfortably spend in your retirement years. You can also run different scenarios to explore what would happen if (for example) you decide to retire earlier or later than your original plan, help a family member with a deposit for a house or their student fees, or downsize at some point in the future.
If you want to find out more about the benefits and costs of a subscription, click here. And if your subscription has lapsed, getting it back on track will cost you just a few pounds a month.
