Martin Lewis provides advice on tracking down lost pensions
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Pension saving usually occurs over decades as individuals gradually build up a pot to cover their retirement. However, many may stand to miss out from the simple error of losing track of their savings over time.
As such, Britons have been urged to take stock of their savings ahead of leaving the workforce.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Losing track of pensions is easily done but risks derailing your retirement planning.
“A combination of job hopping and moving home means there’s a high likelihood you could lose sight of a pension plan.
“You may forget to update your contact details, or the company could change its name and before you know it you could be missing out on thousands of pounds of pension income that could have a real impact on your retirement lifestyle.”
Individuals regularly change jobs throughout their lives, and it is estimated Britons go through 11 roles in their career on average.
As auto-enrolment is now in play, beneficial for saving, it could mean a different pension in each working role.
As a result, it could become all too easy to lose track of arrangements, particularly from roles a person spends the least amount of time in.
However, to avoid missing out, it is vital individuals keep track of their arrangements.
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The issue, experts have stated, is only compounding over time.
Ms Morrissey continued: “It’s a problem the DWP has already said could result in up to 50 million lost pensions by 2050.
“These people are potentially missing out on thousands of pounds of hard saved pension savings that could really boost their income in retirement.”
Thankfully, for those who do believe they have misplaced one of their pensions, all is not lost.
This is because the Government has developed the Pension Tracing Service designed to provide assistance.
To use the service, Britons will need either the name of their employer or their pension provider.
From this point, they should be provided with the necessary contact details to reach out themselves.
Once a pension has been located, individuals will be able to offer their provider their new contact details so they can be in touch with their savings once again.
The Government is currently working on a pensions dashboard, which will allow Britons to see all of their arrangements in one place, consequently making it easier to keep track of savings.
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However, this is on the horizon in terms of being rolled out, and thus Britons may have to wait a while longer.
Meanwhile, there may be more immediate solutions to the issue of losing track of pensions.
Ms Morrissey said: “You may also decide to consolidate all your pensions into one or two plans to make it easier to keep track of your retirement savings. Going down this route can save you a lot of ongoing paperwork and give you a better idea of whether you are on track to hit your retirement goals so it could be a really good option.”
However, the expert also stressed it is important to check whether consolidation is the right choice. It may not be suitable for everyone, depending on their circumstances.
She added: “For instance, you might have a pension with guaranteed annuity rates in force which would give you an enhanced income in retirement.
“It is important that your efforts to streamline your pension planning don’t also streamline your retirement income in the process so it’s worth checking and taking advice or guidance if you need to.”
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