Not knowing where your pensions are held can lead to you losing track of them, which can affect your retirement income.
Survey of 2,000 people conducted by Opinium on behalf of HL in April 2024.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown: “It’s easy to put off tidying up our pension admin, but doing so risks us losing out in retirement. Almost 40% of people admit they don’t know where their pensions are held, and this puts them at extra risk of losing track of them altogether.
The problem lessens as we get older with only 8% saying they definitely don’t know where all their pensions are held – however a further 18% admitted they aren’t sure. The problem gets much worse for younger people with almost half of the 18-34 age group admitting they either don’t know or aren’t sure where their pensions are held. This could be because older generations have been less impacted by auto-enrolment and so have fewer pensions to begin with. Others may have decided to keep track to minimise the risk of losing them in the run up to retirement.
You might not stay in a role for very long and so think it doesn’t really matter if you lose track of a pension. However, small pensions grow over time and so not keeping track of them could leave you thousands of pounds out of pocket when you come to leave work. The most recent data from the Pensions Policy Institute estimates there is around £26bn of lost pension money washing around the system, with the average lost pension being worth over £9,000 – so it’s well worth keeping track!
Auto-enrolment means many of us will get a new pension with every job we do so we could end our working life with multiple pots. The government is looking at how to introduce a Lifetime Pension whereby people can choose the pension they want their employer to pay contributions into. This will go a long way towards helping people keep track of their pensions, although this will take time to implement.
In the meantime, there are things you can do to make sure you aren’t losing track of all important pension money. Take the time to make a list of where you’ve worked and check to see if you have pension paperwork for each one. If not, contact the Government’s Pension Tracing Service and they will help you find contact details.
Once you’ve tracked your pensions down, it might be worth consolidating them into a SIPP. Having one overarching view of your pension can lead to better retirement decision making and give you a clearer idea of what you have. However, make sure you aren’t missing out on any valuable benefits, such as guaranteed annuity rates, or incurring expensive exit penalties by doing so.
With the most recent HL Savings and Resilience Barometer showing that only 39% of households are on track for a moderate retirement income it is clear we must do all we can to make the most of our savings. Keeping tabs on where we are saving as we go through our working life is an all-important first step.”
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