Current estimates suggest that there could be as many as 2.8 million lost or forgotten pension pots, worth an average of £9,500 each – over £26.6 billion in total.
However, when savers actually do find “trace their pensions” they could be in a far better financial position than they previously thought.
Patrick Luthi, CEO of NOW: Pensions, said, “If like many people you’ve had multiple jobs during your working life, it’s highly likely you’ll have several workplace pensions scattered around. More than £26.6 billion is currently sitting in lost pensions across the UK, equivalent to £809 for every working person.
“If you don’t have a complete picture of your pension savings when you plan for your retirement, it’s impossible to know how many years you can ‘afford’ to retire for and the level of comfort you can expect to enjoy.
“The good news is that, when savers trace their pensions, they may actually find themselves in a better position than they first thought.
“Research among our members found that savers have very low awareness of the benefits of consolidating pensions. The potential gains can include cutting down on admin time, feeling more in control of your finances and future plans, and also potentially reducing the pension charges you have to pay. Put simply, consolidating your pensions can make it both simpler and cheaper to plan ahead for retirement.
“Consolidating pension savings isn’t always the right solution, and savers should consider the pros and cons as well as seeking advice if needed. The Money Helper service is a great place to start with lots of helpful guidance on its website.
“We welcome the Government’s focus on fixing the small pots issue which will mean that small, deferred pots will be protected by consolidator schemes and won’t be left behind when people move jobs. We look forward to continuing our work with the Department for Work and Pensions on a small pots solution that will work best for savers.”