Happy birthday to your pension! But wait... where is it again?
16 Jan, 2023
Sponsored by Standard Life
You didn’t forget, did you? Surely the date was circled in red biro on your calendar… October is the 10th birthday of auto-enrolment, better known as your workplace pension. Or workplace pensions, as the case often is. Because in all likelihood, you’ve got more than one… whether you realise it or not.
Over the last ten years of auto-enrolment, employers in the UK have been obligated to enroll all new employees onto a pension scheme. Some employers have been doing it unprompted for decades, and now the rest have to as well unless you ask them not to. That means that if you’ve changed job 6 or 7 times over your working life, you might have 6 or 7 pensions kicking about. And that’s on top of any other pensions you have.
On the face of it, having multiple pensions doesn’t seem so bad. You just have more pots of money you can dip into one day, right? True enough, but you also have more pots to pay fees on and more pots that can go missing. Which happens. A lot!
The case of the missing pensions
You might be reading this and thinking, “No, no, that’s not me. I don’t have any extra pensions to lose!”. And that thought alone – mystery solved – is how you lose your pensions. Or it’s one way, at least.
Another way is to change your address and keep it quiet. If you move house and forget to tell your pension provider, they don’t know where to find you and you eventually forget them.
Or maybe it’s simply that you don’t pay much attention to your payslips, so you don’t notice that a small portion is getting squirreled away each month into a pension. 5% is easy to miss when it’s invisible, but over the years this small portion adds up, so it’s worth finding out what you have and where it is. Who knows… you could be sitting on a small fortune.
Is it worth tracking down my pensions?
Yes! £26.6 billion in savings has already gone missing. Despite their potential value, an estimated 2.8 million of us in the UK have misplaced a pension. According to The Association of British Insurers, this could be worth a total of £26.6 billion. So if you’re guilty of misplacing yours, don’t worry about it, you’re not alone!
The first thing to do is find them again, which is easier than you might think. Then, if you find you’ve got more than one pension kicking about, the next thing to do is think about combining them. This way you’ll be able to cut down on the charges you pay for each account and make sure your savings are invested in line with your long-term goals.
How to find pensions you’ve lost track of
What you need to get started:
• National Insurance number
• Name and address of previous employers
Use the official Pension Tracing Service
When you have your details to hand, you can use the Government’s pension tracing service to find your pensions and contact the providers.
It’s a surprisingly easy process and well worth doing, even if you only want to have a nose at what you’ve saved and leave it there. But if you also want to streamline your savings and cut down the fees you pay, you might want to consider pension consolidation.
Is it worth getting someone to combine my pensions?
That usually depends on how many pensions you have and what types of pension they are. Most of the time, especially if you’re someone who has 6 or 7 pensions, it’s a good idea to combine and streamline them. But if you have one of the old ‘final salary pensions’, you should leave that one where it is. Equally, if you have an old pension with particularly attractive benefits that you can’t find anywhere else, like extra tax-free cash or amazing life insurance, you might want to keep hold of that one too.
Usually, the main benefit of combining pensions (called pension consolidation) is to cut down on fees. But it doesn’t end there. If you need more convincing – from better investments to more options at retirement – read our 10 reasons to combine your pension pots.
How to combine your pensions
If you thought tracking down your pensions was easy, wait till you see how combining them works. With pension consolidation, you don’t really have to do any of the legwork. Simply choose a new pension provider and pension plan, give them the details of your old plan, and let them do the rest.
1. Track down your pensions using the government tracing service.
2. Decide which pensions to combine and which to keep separate (more on that here).
3. Choose a new or existing pension provider to manage your combined pension.
4. Ask them to start the pension consolidation process for you.
5. Depending on the provider, it could take a few weeks or a few months to complete.
