Could you be missing part of an unclaimed £19 billion pot?

In recent years, we have experienced a shift in society that has seen people no longer having one job with the same employer throughout their working lives. This could be because the number of redundancies is higher than ever; more people are choosing to retrain and take on completely new careers and some are following their dreams and leaving the 9-to-5 job to become their own boss. Whatever the reasons may be, one thing is clear, the number of jobs we hold throughout our working lives has most definitely increased. 

On average, around 9% of people changed jobs every year between 2000 and 2018. The Association of British Insurers (ABI) says more than 1.6 million pension pots worth £19.4 billion are ‘lost’, that is an average of nearly £13,000 per plan. You could be at a disadvantage if you do not know how much your pension pot is worth, where the funds are invested, what fees you are paying, or how that pension could be used to plan for your perfect retirement.

The Government is looking into how to fix these problems, by creating a new pensions dashboard tool that anyone can use to see all their pensions in one place:

“Pensions Dashboard will transform how savers access their pensions facts and figures, allowing people to see what they have in their various pensions – including their State Pension in a single place online, at any time they choose,” according to the Department for Work and Pensions.

In this article, I will tell you the exciting news about the dashboard and give you the latest update, along with some tips if you want to act quickly.

The Pensions Dashboard

Something this comprehensive and complicated involves a lot of time and cooperation from pension providers and needs to be right! So, it is no surprise the new dashboard is not going to be available anytime soon. It was due to be released in August 2023, with access to the public in 2024; however, it was announced in February 2023 that the dashboard is facing a delay.

What is the latest update?

Laura Trott, Parliamentary Under Secretary of State for Pensions, stated, “More time is needed to deliver this complex build, and for the pensions industry to help facilitate the successful connection of a wide range of different IT systems to the dashboard’s digital architecture.”

The Pensions Dashboard website shows they have currently completed Phase 2 (Develop and Test Phase), with another three phases still outstanding.

So, while you could sit back and wait for the Pensions Dashboard, it would be recommended to start contacting your previous employers or use the Government tracing service to chase old providers and reclaim those lost pension pots.

The Pension Tracing Service

The Pension Tracing Service is the current Government service that can help you find all your old pensions from previous employers. While this service will not tell you specific details on any pension benefits, it can give you some beneficial tools to help you locate the pension provider your previous employers may have used, which can in turn help you locate any lost funds.

The tracing service was released in 2016, and is a great and free way to start looking for old pension pots. With information on more than 200,000 pension schemes, you can find missing pots but please keep in mind the following:

• it is only for workplace pensions and personal pensions
• its purpose is to provide contact details only
• the site provides template letters for you to use

So, if you do not want to wait until the new dashboard is released, you could start to locate your missing pots as per the above but what tips would I have for you? 

Well, I was discussing the matter of regularly changing employers and having unclaimed pensions with a close friend recently, who raised a few questions (it is no surprise he found the subject interesting as his recruitment adviser recommends he switches employers every two years!). We discussed the following:

How can I access the Government Pension Tracing Service?

The Government’s Find pension contact details page is a great starting point. You can find out the information about your previous employer online, by post or by telephone.

I have found my pension pots. What next?

You have several options available to you, such as transferring them and consolidating them to your current provider, or you could leave them where they are. Reaching out to a financial adviser would be recommended to weigh up all your options, discuss your retirement strategy and evaluate the pros and cons of moving your pension pots.

What if my previous employer is no longer around?

Not to worry, as pension pots are held away from the business, it should mean your pension should not be affected.

So, while the new Pensions Dashboard is no doubt going to be a useful tool for everyone to use, there is no harm in taking the driving seat and reclaiming those missing pots out there sooner rather than later.

Kam Singh is a Wealth Management Consultant at Mattioli Woods plc.