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- Retirement
We are increasingly accruing workplace pension pots – and then losing trace of them: how can you track down your money?
If you’ve worked for more than one company during your career then it’s likely that you’ve paid into several different workplace pensions. What happens to our pensions when we leave? They’re all out there, waiting to be claimed.
It’s estimated that there is nearly £20 billion of savings held in 1.6 million lost or dormant pension pots in the UK – that’s nearly £13,000 per pot (Pensions Policy Institute, ‘Lost pensions: what’s the scale and impact?’, October 2018).
Pension Tracing Service
In a recent interview with BBC Radio 4’s Money Box, Claire Trott (Head of Pensions Strategy at St. James’s Place) gave her advice for tracking down your lost pension pots and what to do once you find them.
If you search online, Claire explains, there are several companies offering services – usually set up to transfer your business to them.
Instead, go to the gov.uk Pension Tracing Service at www.gov.uk/find-pension-contact-details . You can also call 0800 731 0193 or contact them by post. You will need the names of companies who have employed you. This will work even if the company no longer exists. And you can get the name a bit wrong and it will give you closest matches.
Note that the service will not tell you whether you have a pension, or what its value is. What it will do is tell you the name and contact details of who’s running the company pension scheme.
There is a ‘Pensions Dashboard’, Claire notes. This will eventually make all of an individual’s pensions information, including the State Pension, accessible through a single portal. But it’s very much still in development (pensionsdashboardproject.uk).
Consolidate your pensions?
So, once you’ve found your pensions, what do you do next: can you cash in a pension from an old employer? With any pension, you can’t access the holdings until you’re 55. For small pension pots, Claire notes, you might just want to encash them once you reach this age.
You could decide to consolidate your pensions. This can lower charges and avoid dealing with several providers. Transferring out of recent schemes is relatively straightforward, as they are more flexible. Switching can be difficult from older schemes, as some may still impose punitive exit penalties. Also, some schemes may offer valuable benefits that you couldn’t match today, such as guaranteed annuity rates.
Personal advice
Whether you should consolidate your schemes relies on the nature of these pensions and your personal circumstances. This is where a professional adviser is really invaluable.
Many of us will also want to know what our pensions are invested in and whether this reflects our values.
Your St. James’s Place Partner would be happy to discuss this with you.
Find out how we can help you in the run-up to your retirement.
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