Why are there so many unclaimed pensions?
Whenever you join a new company in the UK, you are automatically enrolled into the company’s workplace pension scheme.
This has been the case since 2012, when ‘automatic enrolment’ was introduced to help boost the number of people saving into a pension.
Automatic enrolment has been hugely successful in this regard, but it has also meant many people have ended up saving into pensions and then forgetting about them when they move jobs.
How do I know if I have missing pension pots?
If you look through your CV for the past 15 years or so, the chances are that you have a pension for every job you’ve held during that time.
If you aren’t sure where that money is, there’s a chance it is currently ‘missing’ – but it is easy to reclaim the lost cash.
How do I track down my old pots?
Have a look through old paperwork to see if you can find anything relating to your pensions. The paperwork will likely be from your workplace pension provider. These are companies such as Hargreaves Lansdown, Fidelity, Royal London, Scottish Widows or Legal and General.
Your paperwork should have some kind of client number or reference number on. You can use this to create an online account for your pension or to get information about your pension from your provider.
If you don’t have any paperwork, it is a bit more complicated, but it’s not impossible. There are tracing services you can use designed to find your old pots with limited information.
This is why we have a partnership with free pension tracing service Gretel, which only requires your name and address to start looking for your old pension pots.
If you know all the places you have worked and your dates of employment, this could also help. You could try calling your former employers’ HR department to ask for details about your pension.
The Government also has a pension tracing service you can use for free.
How can I keep track of my pensions?
Once you have tracked down your old pensions, a way to keep on top of them in future is to consolidate them all into one new pot.
To do this, you need to open a new account with your chosen provider. You can then request to transfer your old pensions in by providing the details from your old scheme. Your new provider should do the rest of the legwork for you.
If you want to manage your own investments going forward, you could consider opening a Self Invested Personal Pension (SIPP). These usually have a wider range of investment options than regular pension schemes or personal pensions.
You can read about our top SIPP picks here.
Should I combine my pensions?
Benefits of pension consolidation
One of the big advantages of combining all of your pensions is that you will be able to easily see how much you have saved in one place and plan for your retirement accordingly.
You are also much less likely to accidentally forget about some of your pension savings, and it means less admin too.
It’s also a good idea to consolidate old pensions to ensure you are paying one low charge. Older pots tend to charge higher fees, which can eat away at your savings.
Millions of people are believed to have money sitting in old pensions with high charges.
Data revealed through a freedom of information request to the City watchdog, the FCA, last year found around 10million pensions are held in ‘closed book’ accounts, which typically charge high fees of around 1%, far higher than the average of 2% most schemes now charge.
Downsides of consolidation
However, be aware that by moving your pension from one scheme to another, you could potentially be giving up valuable benefits.
Always check if your pension has any benefits attached to it before switching it to another scheme. Your provider will be able to tell you this.
It’s also important to make sure you are not switching to a scheme with higher fees, unless those fees are justified – for example, if the new pension provides a service that is valuable to you and you can’t find elsewhere.
Make sure you check the charges you will have to pay before you move.
