The PPI defines a pension as “lost” when the provider is unable to contact the saver who owns it. The recent spike in the number of lost pots has been blamed on workplace pension auto-enrolment
Millions of Brits could be in with a chance of a £9,400 boost if they have one of the millions of “lost” savings pots in the UK.
According to a study by the Pensions Policy Institute (PPI) charity, there are around 3.3million pension pots in the UK which are considered “lost”. Collectively, these pots are believed to be worth around £31billion.
This is up from £26.6billion in 2022 across 2.8 million accounts and is an increase of 60%, or nearly £12billion, since 2018. These lost pensions are now worth an average of £9,470, rising to £13,620 among those ages between 55 and 75.
The PPI defines a pension as “lost” when the provider is unable to contact the saver who owns it. The recent spike in the number of lost pots has been blamed on workplace pension auto-enrolment.
As workplaces enrol all workers over the age of 22 into a workplace pension, those who move jobs frequently could end up with multiple pots they may not fully be aware of.
Although this has been an issue for the last few decades, now that every employer needs to offer one, it is expected to push up these figures even higher.
PensionBee warns that a “national crisis” could be ahead as the total number of UK pension pots is expected to rise 130% from 106million to 243 million by 2050.
Chris Blackwood, spokesperson for the Pension Attention campaign, said: “If you can do one thing today, use the pension tracing tools to find any lost pension pots. It only takes a few clicks, and you could substantially add to your pot.”
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You can track down lost pension pots yourself for free by contacting ex-employers and digging out old paperwork. The Government also has a free Pension Tracing Service tool.
This service allows you to enter an employer’s name to find the contact details of the pension provider they use. The helpline will then provide contact details so you can get in touch.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, highlighted the urgency of tracking down a lost pot sooner rather than later, as the money could have a “major impact” on your retirement planning.
She noted that even the smallest pensions can grow over time, and that the pension you paid into a decade or more ago could well have grown a “decent amount.” For example, a £10,000 pension pot would be worth more than £16,400 after 10 years if it grew at 5% per year.
She said: “This could play an important role in your retirement income. With 21% of people admitting to having lost track of a pension and a further 18% being unsure if they have, it’s a major issue. The good news is that you can do something about it.”
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