Research from Friends Life reveals that nearly 70% (68.14%) of Britons do not know the collective value of their pension funds and 10% have no records of corporate pensions held with previous employers.
On top of this, a further 32% (32.35%) are unsure of where relevant pension paperwork is located. These startling figures demonstrate the apathy that a significant proportion of the population display towards pensions.
The DWP's consultation on small pots1 estimates that there are currently in excess of one million small pots in the current system. Based on our survey results, which show the potential for these pots to become untraceable at retirement, this means that currently up to £200million could be lost in future retirement income. The consultation also estimates that there will be more than a seven-fold increase in the number of small pension pots in the system by 2017, with the number of new small pension pots under £2,000 created each year reaching 370,000. This could equate to an extra £74million in pension savings per year potentially being lost.
The survey findings also reveal that:
-Over 30% of us have pension pots with two or more employers, with a further 5% unsure of how many pots we have.
-Over 40% believe they are not paying any charges on their pensions with a further 26% saying it doesn't cost them anything as their company pays.
-Women are more apathetic when it comes to pensions and are less likely to know how much their pension pot is worth, with 72% unaware of the collective value compared to 64% of men.
-Women are less likely to keep track of pensions documentation, with over 11% having no record of all their pensions compared to 9% of men.
Colin Williams, managing director of Corporate Benefits, Friends Life comments:
"This astounding research shows that people are not paying enough attention to their pensions. We believe that every year individuals are losing out on significant savings held within pension funds that they are unaware they have.
"It is imperative that people are aware of where their money is and what it is doing for them. Too often pensions are deserted and not considered properly before it's too late. Making sure you are aware of the pensions you have, the amount you and your employer are paying, what charges there are and how much each pension plan is worth is essential for retirement planning.
"We always urge consumers to think about these factors long before you are approaching retirement."
Pension holders should ensure that they:
1) Track down all pension pots from previous employers
2) Start and maintain a list of all policy details from previous corporate pensions
3) Keep pension providers updated with current contact details
4) Use the government's Pension Tracing Service if you are struggling to track down previous policies
5) Consider seeking advice on the merits of consolidating small pots under one provider for ease of management and planning.
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