Unclaimed Pensions: There’s a treasure trove waiting for some people, so find out below how to track down your old pots

Now everyone is automatically enrolled in a new pension every time they change jobs, we all build up more and more pots, and many of us lose touch with them as time goes on.

The number of lost pensions has risen 75 percent over the past four years to 2.8 million, and they are now worth 37 percent in total at £26.6 billion – or £9,500 on average.

Changing jobs, auto-enrolling with every move and people’s tendency to lose retirement information and not update plans with contact details are all at the root of the increase in orphaned jars.

The cost of living crisis has highlighted the importance of tracking down lost pensions to boost your ultimate retirement income, according to an industry campaign to help people find them.

“If ‘lost’ pots are not reclaimed, people will have a harder time reaching their desired retirement income and will be more dependent on state pensions and means-tested benefits,” said pension adviser Punter Southall Aspire, who leads the initiative.

“People risk losing value by missing out on pots because they haven’t had a chance to choose better retirement products, more appropriate investments or consolidating pots to take advantage of lower rates.”

The value of lost pots has risen significantly and the problem will continue to grow without intervention, according to the Institute for Pension Policy, the research organization that compiled the above sector-wide figures.

‘One of those interventions are pension dashboards, about which the research shows cautious optimism among providers,’ says the PPI. ‘By conducting this research just before the launch of dashboards, we can evaluate their impact.’

For the pension industry, there are administrative costs associated with keeping records of lost pots and trying to keep people informed using deceased contact information, some of which may be very small.

And from the point of view of individual savers, who could have many such pots, it’s worth tracking down and keeping an eye on them between now and retirement age.

The industry campaign group encouraging people to find old pensions is proposing to set time aside on Oct. 30, when the clocks go back and you get an “extra” hour in the day.

Below is a guide to locating your old funds, using the government Free Retirement Tracing Service as a starting point.

Be careful when searching the internet for this official service as there may also be links to companies that charge you, try to beat you up with other services or be fraudulent.

If you find old pensions and register your current details with them, make sure to keep them up to date with your new address when you move in the future.

How to track down lost pensions

Retirement consultant Punter Southall Aspire offers the following five-step guide.

1. Previous Employers

Make a list of all the places you’ve worked. Old resumes, payslips, P45s or P60s can help.

2. Old Paperwork

Take a look at your papers and see if you have pension statements from all your old employers.

Also check that your contact details on all your pension statements are up to date.

3. Online Search

Check if there are any gaps where you do not have a pension statement for an employer. Use the government Pension tracing service to find the contact details of their pension scheme.

If you can’t find them, it could be because your old employer was taken over. You can find out if they were by searching Company house or the Government Charity Registry.

You may also need to contact your old employer or co-workers to find out the name of the executor if your employer has used a “communal personal pension.”

4. Get in touch

If you have the contact details of your old employer’s pension scheme, get in touch and see if you have a pension with them.

You need your social security number to prove that it is you who are contacting them [you might also be asked for your pension plan number, if you have managed to unearth it, and your date of birth]. Also check whether you have not transferred to another pension.

5. Pension valuation

Ask how much your pension is worth and receive an up-to-date overview.

Also provide your contact details to the provider so you can keep in touch and ask if you can register with them online to easily access your retirement information.

“The rising cost of living makes it all the more important for people to track down the money they’ve worked and saved so hard for,” said Alan Morahan, Chief Commercial Officer at Punter Southall Aspire.

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‘The combination of more people switching jobs more often and automatic registration will probably lead to more lost pensions.

“That’s why we’re working with our industry partners to raise awareness of the issue and encourage consumers to take action.”

Ros Altmann, former pensions minister and campaigner, says: ‘Many Britons are unaware that they may have thousands of pounds that could help them boost their pension funds as they battle the current cost of living crisis.

“There could be more than a million people in line for a windfall, not yet knowing what their ‘buried treasure’ is.

Ros Altmann: Many Britons are unaware that they may have thousands of pounds that could help them boost their pension funds

“If you’ve moved, relocated or your old company was taken over, your old company pensions may be languishing somewhere, so now is the time to try and find them.”

But Baroness Altmann warns: ‘I am concerned that pension funds are being used to meet rising costs and that more people are stopping saving for the future to meet short-term needs.

“This is understandable, of course, but it could see a massive increase in retirement poverty and anyone who opts out or is considering withdrawing their money should have a plan in place to rebuild their pension later if possible.”

Sarah Pennells, Royal London consumer finance specialist, says: ‘During the cost of living, it’s more important than ever to track down your lost pensions – it’s easy to do and it’s free.

“You don’t have to pay a cent to track down a lost pension, you can do it for free.”

Pennells says the Retirement Information Service only tells you the contact details of your pension administrator, not whether you have a pension or how much it’s worth.

‘Even if you have pension papers from a previous employer, that does not always mean that you are entitled to a pension.

‘It is possible, for example, that you received your premium back from that employer when you left. With many older company pensions it was also possible that you had to be a member for a number of years before you were entitled to a pension.’

She adds, “Beware of scammers. Scammers are quick to ‘piggyback’ on legitimate events, so may be more active around National Retirement Discovery Day.’

Helen Morrissey, senior pension and pension analyst at Hargreaves Lansdown, says: ‘Finding a lost pension can be the difference between struggling to make ends meet or retiring a little more comfortably.

‘You may be able to afford to go part-time or work longer in the years leading up to retirement, so keeping your retirement contact details up to date is vital.

“Once you’ve found your lost pension, it might make sense to consolidate it with any other pensions you have. This makes it easier administratively to keep track of and you have a clearer picture of what your savings are – it can affect your retirement decisions.

‘Almost a third of the respondents indicated that they would like to do this.

“But before you do this, it’s important to check whether there are any terms on old pensions that could cause you to miss out on valuable benefits or cost you money if you decide to consolidate.

“For example, older policies can incur high exit costs if you try to move them, or they can have attractive terms, such as guaranteed annuity rates.

“Checking these things in advance can save you a lot of hassle and give you a clearer picture of what you’ve collected so far.”

Dug up your old pensions? Don’t be tempted to tap them before age 55

Beware of the risk of fraudsters stealing your pot, plus a huge tax levy that will be levied by HMRC even if your money has already gone missing in a scam.

There are very limited exceptions to the 55 year rule and we don’t know of any legit company that will help you take your retirement early outside of them, through a loan or otherwise – just scammers.

The most popular question about pensions via internet searches is ‘Can you cash in your pension at any age?’, according to analysis by pot consolidator PensionBee.

It calculates the number of times this question is asked by the public has increased by 147 percent in the past year.

“There are only a few instances where savers can release their retirement benefits before age 55, such as extreme health conditions or terminal illness,” the company warns.

‘No reputable pension provider will approve early retirement unless these conditions are met.

“There are plenty of retirement scams that claim to help savers access retirement before age 55 by exploiting loopholes in the system.

“Unless a saver meets some of the above criteria or has been explicitly informed by an executor that they qualify for early retirement, savers should never trust a third party to withdraw their pension on their behalf.”

This is Money’s retirement columnist, Steve Webb, gets a steady stream of questions from people in financial trouble who want access to retirement before the age of 55.

We are responding to warn anyone who contacts us of the dangers. Steve has answered reader questions about getting a retirement pension before you are 55, and alternative options open to you — especially if you’re in debt — here.

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