How to trace a lost pension
Research suggests one in five adults have lost their pension. So, how you trace it once it's lost?
More than 7 million people in the UK may have lost track or be unable to find one or more of their pension funds.
Research by the financial services company Aegon has found that around 64 per cent of people have multiple pensions. Of those, the number who have lost track of one or all of their pensions is 22 per cent. This means that more than 7 million people could have misplaced some of their retirement savings.
Wealth management group Tilney also estimates that one fifth of people have a missing pension, often because they failed to notify providers when they moved address.
Lost Pension Paperwork
According to Tilney’s research, the average person has worked for six employers by the time they are over 55. Keeping track of pensions can be difficult, particularly if you’ve moved around a lot, changed jobs frequently, lost paperwork, or worked for a former employer which merged with another company, was taken or, or went bust.
Often post goes astray when you move house. Trustees of the pension fund don’t know how or where to contact missing members of the scheme if there is no forwarding address and you left the company a long time ago.
This is a problem that looks set to get worse among the younger generation as changing employment patterns mean people these days are more likely to work for multiple employers over their working lives and have lots of small pension pots.
Although it may seem as though incredibly difficult to track down a pension, your effort is unlikely to be wasted. Even small amounts of pension left to grow over the years in an employer’s scheme will be worth something and you may be able to combine funds making them manage and reducing potential costs.
However, you should take professional advice before you do this to ensure you don’t end up with a bigger tax bill or hefty penalties for withdrawal.
How do I find my lost money?
The first step is to search the UK Government’s Pensions Tracing Service. This is an online database which provides current contact details for past and present pension schemes.
To use it, you’ll need to know the name of your former employer, pension scheme or provider.
Next year, the task should be made even easier when the Department of Work & Pensions (DWP) launches the Pensions Dashboard. This will provide a consolidated view of all your pensions alongside the State pension.
For now, it is worth trying to locate your own pension, even if you suspect it may not be worth much.
How to trace your pension
1. Use the DWP Pensions tracing service to find your pension by entering your old employer’s name which will generate the current contact address. Simply write to this address, with your current and any previous name, current and previous addresses and your National Insurance number. Go to: gov.uk/find-pension-contact-details
2. Some pension schemes won’t have been updated for some time. To get the contact details you will need to fill out an online form with your name, email address and any information you believe is relevant such as the dates you were at the company and your National Insurance number.
3. Get a State pension forecast, either in paper format or online gov.uk/check-state-pension
4. Once you’ve tracked down your pensions, get advice before consolidating them to make sure you don’t lose out on any valuable benefits.
When i find my pension, what should I do?
One option to avoid losing track of different pension pots is to combine them into one single pension provider. This isn’t an option for everyone because:
- Older pensions may have benefits which would be lost if you moved the money
- You may end up paying penalties to transfer, or receive a lower transfer value than the actual sum you have accumulated
- You may be paying a low charge for your pension to be managed under the current scheme
- You don’t want to consolidate all your funds only to find you are paying a much higher management charge.
Looking to the future
When you do find your pension, you can make the most of it by checking it regularly to make sure it is still suitable for your needs.
It’s important to hold regular reviews: Simply keeping your pensions providers up-to-date on your whereabouts is not enough. Is it making enough money to provide you with a comfortable retirement, or do you need to change the investment strategy?
Understand where your money is invested: Your priorities, risk profile and lifestyle will most likely have changed significantly since you started your pension. Do you need to make some changes?
Is it flexible enough? Pensions are now much more flexible and you can draw down cash when you need it after age 55. Some old-style schemes may not allow you to do this.
HOW WE CAN HELP
If you need expert advice or help and support with your pension and retirement planning from a trustworthy source, contact Unbiased today.
Read more: How to be smart when saving for retirement
Read more: What's the best way to save for retirement?
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