Pension savers encouraged to use DWP service to find lost money – could you get thousands?

Martin Lewis: There is a lot of money out there in lost pensions

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Pension saving will be built up over a number of years, and it is often the case individuals have arrangements dating back decades. However, while this could be advantageous for retirement, it may present problems if savings are lost over time. Research from Aegon has shown the extent of the lost pension problem across the UK, and how many people could be losing out as a result.

The study found that 73 percent of Britons have multiple pensions, an 11 percent increase on the survey taken in 2016.

However, the number of people within this group who have lost track of one or all of pensions stands at 17 percent.

According to the organisation, this means around 6.4million people between the age of 22 and 65 may have misplaced some of their retirement savings.

There are a number of reasons for a person losing track of their pension saving, including a company being rebranded, moving home or departing a former job.

But the important issue to consider is that a lost pension pot means many Britons are missing out on potentially significant levels of income for their retirement. 

Considering this ahead of retirement, then, will be important to ensure one has their affairs in order, ready to leave the workforce and enjoy later life. 

Kate Smith, head of pensions at Aegon, commented on the matter.

She said: “As nearly every job comes with a pension now, it’s no surprise that the number of people with multiple pension pots has increased over the years.

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“It’s really positive to see a fall in the number of people who have lost track of their pensions, which could indicate that people are becoming more conscious of their workplace pensions.

“This doesn’t mean that we can put the challenge of lost pension pots behind us just yet.

“In fact, the number of pension pots per person grows through a lifetime of work and while we await the delivery of pension dashboards, there’s a growing risk that losing track of pensions could become more common.”

A particular issue highlighted by Ms Smith is the smaller pension pots which can often be accrued in a person’s early career, especially when switching jobs.

While these pots may not hold large amounts, if put together, they could really add up and provide a welcome boost in retirement.

Indeed, they could provide an important source of income and provide financial wellbeing for later life.

Ms Smith, therefore, urged Britons to take action sooner rather than later on the issue.

The research from Aegon showed 18 percent of those asked said they had no idea how to find a lost pension.

However, when given the choice of options, Britons faired slightly better in knowing what steps to take.

Some 48 percent said they knew to use the DWP’s Pension Tracing Service, and 42 percent say they would contact their previous employer/s. 

Ms Smith concluded: “It’s not the end of the world if you’ve mislaid some of your pensions, you can easily reconnect by using the DWP’s tracing services or contacting your previous employer or pension providers.

“You might be pleasantly surprised about what you find.”

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