Have you forgotten about a pension?
New research from Aviva has found one in eight people hold a pension that they had forgotten about.
The researchers asked almost ten thousand savers about their pensions and discovered more than 2.5 million pension policies are currently sitting in the back of people’s minds.
Among those with a forgotten pension, most believe they have misplaced one pension pot, although 17% think they have forgotten about two and 6% have forgotten three or more.
According to Government figures, there is an estimated £400m in unclaimed pension savings.
At the same time, almost three in five UK adults are worried about not having enough money to last them in retirement.[easy-tweet tweet=”Have you forgotten about a pension? You’re not alone!” usehashtags=”no” template=”light”]
These forgotten pension pots could go some way towards filling the pension savings gap.
Although tracking down a lost pension can provide a valuable boost to retirement income, those who delay could receive a smaller amount than expected.
Forgotten pensions may have been subject to charges and not invested in the best way suited to the policyholder, making it worth less than it would have been if it was actively managed.
This new research comes after Aviva revealed the lack of engagement around pensions earlier this year.
More than a quarter of savers (28%) admitted to never reviewing their retirement savings, while almost a fifth (19%) of those with a pension said they review it less than once every 5 years.
Because pensions are often the second largest assets we own, after our homes, it is really important to keep them under regular review to make sure they are invested appropriately for retirement.
Aviva also revealed that since the introduction of auto-enrolment over three years ago, the number of pension savers who are unaware of their fund choices or have never reviewed them has risen to almost 1.5 million people or 15% of private sector employees.
This is up from 9% at the start of 2013.
According to Andy Curran, Managing Director, Corporate and Business Solutions at Aviva:
“It’s unsurprising that so many people have pensions they have forgotten about. The ‘job for life’ is now a distant memory with people much more likely to change employer on a regular basis.
“With auto-enrolment doing such a great job of getting more people saving for retirement, we are likely to see the number of pension pots that people hold increase further as each time a person gets a new job they get a new workplace pension.
“People need to be aware of the potential risks of having a number of different pension pots with small amounts of money in each. It’s likely that there will still be charges taken out of those pots for their management and administration and that can have implications if you are no longer contributing into them.
“Consolidating all your pension pots into one place can have its advantages, but needs to be looked at carefully as some pensions come with valuable guarantees that could be lost.”
One option for discovering forgotten pensions is to use the Government’s pension tracing service.
You can use this service to find contact details for your own workplace or personal pension scheme or someone else’s pension scheme, if you have their permission.
Whilst the Government’s pension tracing service won’t tell you whether you have a pension, or what its value is, it is a useful tool in helping to track down the details of a previous employer or pension provider, so you can continue your search with them.