The figures, which come from a freedom of information request, show that the number of enquiries received by the Pension Tracing Service has increased by almost 250%[i] since 2005.
LV= warns that the number of misplaced pensions could worsen as today’s workforce becomes increasingly transient. Today’s average worker can expect to take nine jobs over their lifetime which is twice as many as the previous generation (workers aged 25 years old versus people aged 65 and over).
Today’s workers have, on average, two workplace pensions but one in five (20%) have already saved into three or more workplace pensions since entering employment. As less than one in three (30%) of those workers with multiple pots have chosen to combine all their savings into one, it is easy to see how these pensions could be forgotten or lost track of over time, resulting in many missing out on retirement income later in life.
LV= research has found that one in ten workers look set to miss out on pension savings because they incorrectly believe that if they leave a job they can no longer claim the savings they made into their pension whilst in at the company. The number of workers who believe this misconception rises to one in five (21%) for those aged 18-34. As younger workers are more likely to job hop than their older counterparts, many risk potentially losing out on savings they have built up earlier in their career. Whilst from 2016 pension pots will automatically follow workers, any funds saved before then may remain where they are and risk being forgotten.
Four in ten workers (41%) with multiple pensions say that they aren’t aware of the value of their funds. For these workers, whether old or young, keeping all their pension pots in one place would make it easier for them to keep track of their savings.
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. We would encourage people to seek financial advice to see whether combining their pensions will lead to a better income outcome.”
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