'Lost' pension savings rise to £31.1bn

Millions of workers across the UK are at risk of missing out on a chunk of their retirement savings because they have lost track of older pension pots.

Almost 3.3 million pension pots are currently unclaimed, according to research by the Pensions Policy Institute (PPI), sponsored by the Pension Attention campaign. These lost pensions are worth an average of £9,470 -- rising to £13,620 amongst those aged 55-75.

A pension pot is considered lost when the provider that administers it is unable to contact the saver who owns it.

Previous jobs

The total amount sitting in unclaimed, inactive or lost pension pots adds up to £31.1bn -- a rise of 60%, or nearly £12bn, since 2018.

Among the reasons for this increase are people switching jobs more often and the expansion of pension saving through auto-enrolment.

Many people may have pension plans from previous jobs or contributions to retirement funds that they have lost track of over the years, the Pension Attention campaign explained.

During their career, an employee may work for several different employers -- and accumulate many pension pots as a result. These may often be small pots from short employment tenures, which are easy to forget or lose track of. If the saver then moves house without updating their details with the pension provider, there is currently no easy way for the provider to reunite the pot with its owner.

What you can do

It's particularly important for older savers to be reunited with their lost pension pots because they are closer to retirement and have fewer options for improving their retirement outcomes when compared to younger demographics. This group also faces adequacy concerns because they entered the workforce during the decline of Defined Benefit pensions, but will retire too late to fully benefit from automatic enrolment.

The average lost pension of £13,620 in the 55-75 age group could make a real difference to many people's retirement.

There are several things you can do to trace a missing pension pot. Retrace your career steps, check if there are any gaps in your pension history and contact the relevant provider to update your contact details. If you can't find the paperwork or remember the name of the provider, and the employer associated with that pot is still active, you may just need to contact your old employer. However, even if this is not possible, there are pension tracing services, both private and government operated. Visit the Pension Attention website to learn more.

"It only takes a few clicks, and you could substantially add to your pot," said Chris Blackwood, spokesperson for the Pension Attention campaign.

Financial goals

"Knowing how much they have saved in a pension, and where that money is invested, is one of the most important steps savers can take to maintain a level of control over their future retirement," commented Rachel Vahey, head of public policy at AJ Bell. "Only by having this overall picture can pension savers work out how close they are to achieving their financial goals, and what action they may need to take to get their desired income and standard of living in later life."