Exclusive:
According to an analysis by the Pensions Policy Institute (PPI) charity, around 3.3 million pension pots – worth a collective £31billion – are considered “lost” in the UK
One father-of-four managed to boost his retirement savings by over £14,000 after finding four lost pension pots.
Adam Steven, 41, was one of millions of Brits who have a lost savings account. According to analysis by the Pensions Policy Institute (PPI) charity, around 3.3 million pension pots – worth a collective £31billion – are considered “lost” in the UK. The pots are lost when the pension provider is unable to contact the person who owns them.
The number of lost savings in the UK has skyrocketed over the last year, with the amount put away in them rising from £26.2billion to 2.8 million in 2022 – almost double the number in 2018. Like many others, Adam was aware that he had been enrolled into a number of pension pots throughout his working career as he worked as a contract engineer for almost a decade, but he decided to look into them after talking to some of his older colleagues at work.
He told the Mirror: “I have a few older friends who are coming up for retirement and one advised starting to look into your pensions a year or two before quitting work as it takes ages for the payments to finalise. He told me that with the way it works, you could reach retirement, and all your work payments could just stop. So I wanted to make it easier for myself in 25 years’ time and get my ducks in a row now.”
Adam knew his pension pots would be a little more difficult to locate as he had moved house a few times, and had lost a lot of the paperwork for them, so didn’t have the main details you need to find them through the government’s free Pension Tracing Service online tool. This service allows you to enter the name of an employer, so you can find the contact details of the pension provider they use.
After a little bit of research, Adam decided to use the pension tracing firm Penny to help him locate the lost pots, as it had good reviews online. He also liked the idea of having all his pensions kept in one place. The Penny app helps people find their lost savings pots, as well as offers plans and pension investment options that can be managed through its app.
The service charges a 0.58% fee per year on the value of the pension, which is called the Annual Management Charge (AMC). You’ll also be charged the fund provider fee, which varies based on the fund you select, and you can see these within the Penny app. The group offers a range of funds managed by either HSBC or Vanguard, two of the world’s largest fund managers.
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After giving Penny all the details he had, after a few weeks, the first lost pension pot came through, and to Adam’s surprise, it contained a whopping £5,000. Others followed over the next few months, and overall, Adam found £14,008 across four different pots. He said: “They also found one I had no idea about, so that was a nice surprise.” The smallest pot discovered only contained £400, adding: “This was from when I was a trainee. I tried to opt-out at the time as I knew I wouldn’t be there long but missed the deadline.”
After finding the lost pots, Adam then had to transfer them all to Penny, which took much longer at around 12 to 14 months. “It really hit me then that you should do this earlier rather than later. If you are 65 or 66 and you haven’t done this work, you may have to keep working to survive until your pensions kick in. And even then, because you left it so long, they may be even harder to find.”
Since the transfer process was completed, Adam has watched his pension pots grow alongside his current workplace one. Over the last year, his overall Penny pension savings has gone up by £2,900, taking his pension pot to £17,036. “I have always made sure I increase the amount I’m saving into my workplace pension when I can,” he noted, “But I have four kids who are all teenagers, so putting more away can be tricky.”
Adam believes retirement will change over the next two decades as we live longer. He said, “It might be a thing of the past, as I don’t think there will be as many people retiring as there were in my mum and dad’s or my gramps’s era. People are living longer, so they will have to work longer, especially people who rent, which I am one of. When I reach pension age, the pension will barely cover the rent. So I don’t know what’s going to happen after that.”
Even though Adam has his concerns over retirement, he says his colleague’s advice was the “best advice” he had ever been given. He said: “Whatever happens. it will generate another income of some description. And if I hadn’t done that work, then I could have lost money. So yeah, it’s all of a benefit at the end of the day. I don’t think anyone will have enough in their pension pot to live comfortably, so you’ve got to pile in as much as you can. I would like to stop working one day. I’m just hoping the pensions I have with Penny just keep steadily growing as they have over the last couple of years. That’s definitely a positive to see, whatever happens.”