Nearly one in four lose track of pension pots
New research shows 23 per cent of UK adults have lost track of at least one pension, and that consumers are confused and uncertain about how to trace a pension.
A shift in working cultures and confusion around retirement planning is resulting in a pension ‘black hole', with almost a quarter (23 per cent) of UK adults stating they have lost track of at least one pension scheme - according to a new online poll* for Age Scotland partner Age UK.
The poll, aimed at understanding more about people's attitudes and plans for retirement, reveals that nearly a third (30 per cent) of UK adults would try to trace a pension if they realised they had lost track of it. However, people are unsure about how and where to start hunting these pensions down.
Reasons behind the UK's missing pensions
Nearly half of all missing pensions (47 per cent) are simply ‘lost in the mists of time'
One in five (20 per cent) people missing pensions say they have lost their pension paperwork
10 per cent blame the fact that they've moved jobs too many times to keep track of their pensions
Younger generations are more likely to have lost track of a pension, with 37 per cent of those aged 18-44 already having experienced this.
Lost pensions: a symptom of the times
The trend for adults to have a variety of employers over a lifetime, often resulting in multiple work place pensions, is one of the root causes of the emerging pension ‘black hole'.
Tellingly, the average person over 65 has worked for around six (5.6) employers in total, while a quarter (23 per cent) of those aged 25-34 have already worked for a similar number - yet have more than approximately 35 years left before they are likely to retire. This indicates that the younger generation will almost certainly have a variety of pension pots as they get older.
With the UK's financial situation remaining precarious, the findings revealed a mixture of scepticism and uncertainty about long-term financial planning, with 12 per cent saying they don't think that there is any point as ‘nothing is guaranteed', and nine per cent not knowing how to start out planning for retirement. Worryingly, 24 per cent of adults said that they were aware that they should be financially planning for their retirement, but currently can't afford to.
Tracing pensions
The research shows that there is much confusion and uncertainty about how to trace a pension. If they realised that they'd lost a pension, nearly a quarter (23 per cent) of potential pension-hunters would ask previous employers for help; 15 per cent would consult the government or tax office; 11 per cent would look online for advice; and seven per cent would turn to a friend or relative for help.
Commenting on the findings, Heather Smith, Information Manager at Age Scotland, said: "It's really important that everyone sets aside the time to keep on top of our personal admin, such as organising paperwork and keeping details of any financial products safe and secure. This is especially essential for pensions, as it may be some years down the line until they need to be accessed.
"With the number of jobs we have over a lifetime increasing, it's likely that people will accumulate several small pension pots. In a lot of cases these bring a less fruitful income in later life than one large pension pot."
"While some measures are being taken by the UK Government to account for smaller pension pots likely to be created under automatic enrolment, existing pots are not being accounted for. This makes it more important than ever that we keep on top of what we have already accumulated.
"We strongly advise people to seriously think about planning for retirement and the kind of lifestyle you want - it's never too early. At Age Scotland we have a range of information available to help with pension preparations, as well as information on changes to the state pension."
Tips from Age Scotland on finding a lost pension include:
Collect as much information about your previous employer as possible including names, the type of business it ran, previous addresses and scheme dates
Search for any paperwork that you may have received with the pension • Type of pension - try to remember if it was a workplace or personal pension
Call the Pension Tracing Service which can help to track down your lost pension on 0845 600 2537.
References: *A total of 2,312 UK adults (203 in Scotland) were surveyed via an online poll. The survey was carried out by Vision Critical in March 2013. 1 Age UK research shows the average person over 65 has worked for 5.6 employers, while those aged 35 - 44 have already worked for 5.5 organisations 2 Age UK research shows 37% of 18 - 44 year olds say they have lost track of their pension schemes, compared to 27% of 45 - 54s, 15% of 55 - 64s and 9% of 65+
