'Lost pension' warning issued as millions could be missing up to £10,000

Pension gurus have released a guide to help Brits find their missing pension pots, as it's believed a staggering £31.1billion is currently unclaimed in the UK.

Fresh data indicates that there are around 4.8 million "lost" pension pots, with one in ten workers suspecting they've misplaced £10,000.

The primary reason for these lost pensions is the rapid job-hopping culture of today's workforce. With the average person likely to switch jobs nine times over their career, many forget about the workplace pensions accumulated due to auto-enrolment.

It's estimated that each individual could be out of pocket by an average of £9,470, or even up to £13,620 for those over 55. Jonathan Watts-Lay, Director at at work, cautions against dismissing what could be transformative sums of money.

He advises: "It isn't difficult to track old pensions down, it doesn't cost anything and could make a big difference to how much income someone has in retirement."

He then outlines a straightforward four-step method to reclaim any potential lost funds:

List previous jobs

By keeping a comprehensive list of all your past employers, you can streamline the search for your misplaced funds. Having old P45s, P60s, CVs and payslips at your disposal can also be a significant help in identifying which jobs deducted funds for your pension.

Online research

If your job list doesn't yield results, you can utilise the Government's Pension Tracing Service to help locate the contact details for old employers.

Contact

Once you've compiled a list of employers who set up a workplace pension for you, you can reach out to them to find details of your pot or the pension provider they used. If the company no longer exists, you can get in touch with Companies House to obtain this information.

Statements

After obtaining the pension provider information, request the most recent statement for your pension pot. This will ensure you have the latest figures, which may include small amounts of interest you might have accumulated since you last checked on it, and will allow you to update your own details and contact information if necessary.

Once you've located all of your pension pots, it's crucial to assess what type of pension schemes you have as it's not always prudent to simply merge them all. The expert advised people to keep defined benefit pension schemes separate, especially if the value exceeds £30,000.

He explained: "For example, some might have guaranteed annuity rates, a protected pension age, or enhanced tax-free cash. It is also important to check if there are exit fees to leave a provider as this may influence your decision."

To make it easier to manage retirement funds, Jonathan suggested reaching out to the provider of the pension pot you're eyeing to transfer into - usually your current job's pension scheme or a private plan. They'll need details of the pensions you want to amalgamate, but they'll shoulder the task of transferring them.

Highlighting expected delays in consolidation, he added: "Some still send paperwork through the post, which can be a lot slower than secure electronic methods. "Moreover, since November 2021, new safeguards against fraud permit providers to identify or block transfers showing signs of potential scams. To ensure a smooth process, he advised providing ample information to convince the provider that the transfer is bona fide.