There’s a lot to think about when you move house, from finding the kettle to redirecting the mail. Yet while most of us get round to updating our bank details and letting our GP know our new address, only one in 25 remember to get in touch with our pension provider. This means there’s nearly £20 billion of unclaimed pensions1 in the UK from 1.6 million pension pots.
If you’re beginning to think about your retirement, having a good understanding of how much your pension savings are worth can make planning easier. But for many of us with multiple pensions, it can be difficult to know where to begin. Here we look at how you can find a lost pension, and whether transferring your pensions into a single pension pot might be right for you.
How do I find my old pensions?
Research from a YouGov survey showed that only 40% of employed respondents2 in the UK knew where all of their pension details were. Between new jobs, frequent house moves and lost paperwork, it can be difficult to keep on top of our pension schemes. You can find details on your old pensions in three ways:
- Contact the pension provider
- Contact your former employer, if it was a workplace pension
- Use a pension tracing service
You may wish to contact your previous employer and pension provider yourself. However if you’re struggling to make contact, perhaps if the company is no longer trading, or trading under a new name, you may wish to use a tracing service. The government offers a free Pension Tracing Service, although this process can be time-consuming, especially if you have a number of pensions to track down.
We also offer a pension tracing service and will do all of the hard work for you. We charge a fee of £100 but if you consolidate your pension into one of our products within six months, this tracing fee will be refunded.
What is pension consolidation?
Pension consolidation means combining some or all of your eligible pension pots into one. Workplace pensions can often be with a different provider for each job you hold, meaning you could build up several pots over your working life. Consolidation allows you to bring them all into one place.
What are the benefits of transferring my pensions into a single pot?
Combining your pension savings can provide a better way to plan your retirement finances. Having your pension savings in one pot is likely to make it easier to manage and can also save you money, as each provider has its own annual management fee. By moving your pension into one with the smallest management fee, you could be saving money each year. However always get advice, and ensure you shop around, before making any decisions.
Should I put all of my pensions together?
Combining pensions into one pot isn’t right for everyone. You may lose valuable benefits by consolidating, or there may be an exit charge for moving your money.
However, you might choose to consolidate to simplify the paperwork and make funds easier to manage, or potentially reduce fees and charges.
It’s really important to have a good understanding of all your pension savings, and consolidation can help give you a clearer view of how your pension pot is doing and to reduce the paperwork, as well as visibility of any charges you may be paying.
You can begin by simply tracing your pensions, so you can understand where they all are and whether they are eligible to be combined.
How does this help with my retirement planning?
Planning for your financial future is really important. Understanding how much your total pension savings are worth can help you make better decisions about when you would like to retire, and plan for the retirement you want. Many people are unaware of the charges they’re incurring on their pensions or how combining your pension can help you keep track when you do decide to draw your pension income.
If you’d like to understand more about planning for retirement you may be interested in our free course with the Open University which can help you with retirement planning.
For free impartial guidance on how to trace and consolidate your pension, visit the Pension Wise website.
1£19.4 billion of pension pots unclaimed – just because of house moves, ABI, May 2020
2Lost pension pots, The People's Pension, YouGov, June 2018