There are billions of pounds lying unclaimed in dormant or lost pension plans. Here’s how to find out if any of the money is yours and what you can do about it.
If you’ve moved house, changed jobs or ever had more than one pension plan, some of the estimated £19.4 billion currently lying in lost or dormant pension pots could be yours.
It’s easier to misplace a pension plan than you think and happens a lot. The Association of British Insurers (ABI) estimates that more than 1.6 million pension plans, worth an average of £13,000 are currently unclaimed. And that looks set to rise with the Government predicting that there could be as many as 50 million misplaced pots by 2050.
With National Pension Tracing Day taking place this October, it’s the perfect time to make sure you’re on top of all your pension plans.
How do so many pension plans get misplaced?
So, how do all these pension plans get lost and forgotten?
Well, the good news is that every employer now has to provide most of their workers with a pension plan that both they and their employees pay into and more than 10 million people have been ‘auto-enrolled’ since 2012.
The bad news is that many employees don’t pay much attention to their workplace pension plan, or what it’s worth. And then, when they leave or change jobs, many forget all about it.
It’s estimated that the average UK employee changes job every five years, and for some it could be more often. So that could mean a lot of pension plans to keep track of.
The millennial generation is likely to move jobs even more often with research reported by Talint International estimating they’ll have around 12 jobs over a working lifetime. Even more pension plans to manage!
ABI research also found that only one in 25 people would instinctively think to tell their pension provider when they move home, which means contact details are out of date.
How to find old pension plans
If you think one or possibly more of these lost or dormant pension plans could be yours, it’s quite straightforward to track them down.
With your national insurance number, the names and addresses of your previous employers, and some help from the Government’s Pension Tracing Service, you should be able to find out everything you need to know.
If it’s been some time since you took out the pension plan, you could be in for a nice surprise as it’s had the potential to grow in value over the years.
Pension money that goes unclaimed in the future could end up going to good causes. The Government is currently considering plans to expand a scheme that redistributes unclaimed money in bank accounts to good causes. The expanded scheme could include pension plans, investments and some insurance policies. In the existing scheme companies have to try and contact the owners of the money first before handing it over and owners retain a right to claim it back later.
Consider bringing all your pension plans together
If you’re fortunate to trace a lost pension plan or even if you want to make managing a number of pension plans easier, you could consider moving older pension plans into your current plan.
While this might not be right for everyone, having all your pensions savings in one plan can cut down on admin time, as well as potentially reducing the charges you pay.
Some older workplace pension plans might have valuable benefits. Check you aren’t losing these if you want to transfer them in to your current plan. If you’re thinking about moving money out of a final salary (also known as a defined benefit) pension plan you should seek financial advice, which there’s likely to be a charge for.
There’s more information about transferring your pension plan to Standard Life on our website or visit the Money Helper website. And if you don’t have a financial adviser, try unbiased.co.uk to find one in your area.
Remember, a pension is an investment, so its value can go down as well as up and it could be worth less than was paid in.
Getting everything into shape
Tracking down any old pension plans, consolidating them into one plan if that benefits you, and keeping a regular eye on where you are with your retirement savings could help give you peace of mind about your financial future.
There are also really useful tools available, like our pension calculator, that make it easy for you to work out what you should be saving today to make sure that your future tomorrows are just as you want them to be.
And the next time you move jobs or change address, take the time to do the little bit of paperwork that will help you keep track of your old pension plan.
The information here is based on our understanding in September 2021 and shouldn’t be taken as financial advice.