WHEN Paul decided he wanted to put his pensions savings all in one place, he uncovered pots worth £27,000 he’d forgotten about.
The 45-year old, who lives in Merseyside, said he’d kept track of some of his savings but others had fallen off the radar.
He told The Sun: “I’m a quantity surveyor, and I’ve had a number of pensions over the years that I’ve forgotten about.
“Rather than having them hanging everywhere, I wanted them in one place.”
This isn’t unusual, the Association of British Insurers estimates that there around 1.6million missing pension pots, with an average size of £13,000.
In total, it says there is some £19.4billion sitting in accounts people have lost track of or misplaced.
For Paul, part of the difficulty with keeping on top of his retirement savings was that he had moved around for work a lot, which meant his money was in lots of different schemes.
Typically in the UK, most people save for a pension primarily through their workplace.
In the past, people might be enrolled into final salary or defined benefit schemes, something which is still common in the public sector.
But these days, most private sector employees are auto-enrolled into a defined contribution scheme, which is built up through a combination of their own contributions plus tax relief, employer contributions and investment returns over time.
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The auto-enrolment rules say that if you’re over 22 years old and earn more than £10,000 per year from a single employer, you’ll be automatically put into a company pension scheme (unless you choose to opt out).
Every time you move jobs, you’re likely to get another pot set up, which means you could end up with lots of little savings. This is exactly what happened in Paul’s situation.
Like many people with missing pension pots, Paul hadn’t updated his address at each of his pension schemes and he didn’t have all of the logins that he needed, which complicated things further.
He said: “I had the details of some of my pensions, but had lost track of others.
“You start at a company, they enroll you in a pension, you pay in, then you leave the company and forget all about it.
“You then start at a new company with a new pension, and so forth. I moved from company to company for job progression and to increase my salary. I’ve had about seven jobs.”
Paul decided he wanted to track down his savings, partly to help him plan for the future, and partly because having had cancer in his early twenties, he wanted to make sure that all of his affairs were in order.
To do this, he decided to use PensionBee, a provider that allows you to easily put all your money in one place.
The organisation helped him track down all his missing savings, which came to around £27,000 in total.
He said: “I had cancer when I was 21 so of course you are always aware of your own mortality and I just wanted to keep everything in one place should the cancer return or anything should happen to me.”
“If I didn’t consolidate, I would have most definitely forgot about [those pots] and most likely lost all or most of it, in all honesty.
“My PensionBee experience has been really good. I’ve thought about consolidating my pensions in the past but I’ve never known a company that does all the work for you.”
He consolidated the majority of his pensions, but kept one particularly high performing pot where it was.
He added that one of the major benefits is that now he can keep track of all of his money easily, see how his investments are performing and plan for the future.
The extra cash will help Paul meet his retirement goals, which include moving abroad when he stops work and has paid off his mortgage.
He said: “I’m planning to retire in Spain, that’s where I want to go. The extra money helps me feel more financially secure.
“I live a very frugal life, I am hoping to have my mortgage paid off by the time I am 55.
“If there is a shortfall I would ideally like to release some money from the pension fund to clear that off and then in effect my house is my savings pot.”
How to track down your lost pensions
Paul told The Sun that some of his top tips for people starting out on their savings journey is to make sure that all the paperwork and addresses are up to date.
Another benefit to tracking down and consolidating plans is that you can compare charges and make sure you’re not paying more than you need to.
Having lots of small pots that you’re no contributing to, can mean that fees eat away at your cash, sometimes leaving you with nothing.
In fact, recent research from Hargreaves Lansdown shows that multiple pots charges can cost you as much as £880 each year.
If you want to find your missing pensions pot, you can ask an organisation like Pension Bee or Profile Pensions to help you, but you can also do it yourself.
It’s not always easy to find missing funds, but it can be done with the help of the Pension Tracing Service on the GOV.UK website.
This can tell you which schemes you need to contact based on where you worked and on what dates.
Then you can call up all of your providers and start the process of finding all of your retirement savings.
How to track down lost pension savings
IT’S not the easiest to find pensions yourself, but there are things you can try:
- Gather all your pensions documents – If you see any pension providers you don’t recognise, make sure you get in touch and ask if they have more information about your pension and its value.
- Get in touch with old employers – If they’re still in business, contact them to see if they can help you find out which pension provider administered your workplace scheme.
- Use a pension tracing service – If you can’t get in touch with your old workplace, or your hunting a private pension, then could be worth using the government’s free Pension Tracing Service. This lets you search a database of more than 320,000 pension scheme contact details to find your provider.
- Speak to a consolidator – companies that specialise in pensions consolidation can often help you with finding lost pensions too. There can be fees associated with moving the pots together, so make sure you check first.
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