Aviva has launched a new ‘Find and Combine’ pension tracing, checking and consolidation service1 to help savers identify if theirs is one of the millions of ‘lost pensions’.
In 2012 auto-enrolment introduced more than ten million new savers to pensions for the first time. However, as people move jobs, move home, get married, and lose touch with their pension providers, there is now also a record number of lost pensions2 sitting in inactive accounts that pension providers are looking to reunite with their rightful owners.
According to The Pensions Policy Institute the value of lost pension pots in the UK has risen by 37% to £26.6 billion. As many as 2.8 million pension pots are considered lost, which represents an increase of 73% over the past four years, making the typical lost pension pot worth around £9,500.
Aviva is the only UK pension provider to introduce an end-to-end pension tracing service that not only traces lost pensions but also checks them for certain valuable or safeguarded benefits and fees – a feature that is currently unique in the market. With this free service, customers are then presented with their own online pension report in an easy-to-understand format, to help them consider their next steps.
These steps might include consolidating their pension pots or speaking to an independent financial adviser. There is no obligation to transfer or consolidate any of the pensions that Aviva finds on the customer’s behalf.
Since its pilot within Aviva’s Workplace pension business in 2022, the firm has successfully tracked down and reconnected customers with £87 million of lost pensions, worth an average of £15,000 –the largest single pension found to date is worth more than £350,000.
One in fifty (2%) of the checked pensions had a valuable or safeguarded benefit attached to the policy, such as a protected tax free sum, a loyalty bonus or life assurance, that would have been lost had they simply consolidated their pensions without checking.
Joanne Phillips, Managing Director of Direct Wealth at Aviva said, “It’s not surprising that people lose track of their pensions. Some policies date back decades. It’s likely that many people will have changed jobs and moved house several times in the intervening years. The recent uptick in lost pensions has been accelerated by the introduction of automatic enrolment in 2012. This policy has positively transformed pension participation, but with more saving comes the likelihood of more lost pensions.
“Savers shouldn’t worry if they think they may have lost a pension. They should take reassurance that this money is still waiting for them and with just a few personal details, and as little as ten minutes of time, Aviva’s new ‘Find and Combine’ service will do the finding for you, saving you valuable time and effort.
“This is a major first step in our vision to inspire consumer confidence in their finances so they take direct action today to build a better tomorrow. We’re making saving and investing simpler by bringing everything together in one ‘Aviva Wealth’ mobile app, giving customers an easier way to view and manage their holistic wealth in one place.”
The benefits of pension consolidation
When it comes to pension consolidation, Aviva research3 found that although 74% of people consider consolidating their pensions, only 30% proceed because they fear making mistakes or losing money. One in five (21%) don’t feel confident enough to do it themselves, and a further 22% don’t know how to consolidate their pensions.
‘Find and Combine’ makes it easy to consolidate by bringing all the information together into one easy-to-read dashboard so the customer can choose which pension (if any) to transfer.
The unique search service uses Machine Learning technology to speed up the process of locating lost pensions and contacting pension providers. Once found, the request for information from pension providers is digitally produced and responses are read via Artificial Intelligence, translating the information into accessible dashboards. If any information is missing a request is automatically sent back to the pension provider so that all the information a customer needs is presented in one place, before they make a decision.
Joanne Phillips continues, “We believe our new service will give customers the confidence to consider bringing their pensions together to make it easier to better plan for the future.
“We know that every penny counts, so investing time today to trace your lost pension could be the best investment you make all year.”
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