Pension & retirement
The call from wealth management house Fairstone coincides with National Pension Tracing Day on October 30, which sheds the spotlight on the growing issue of lost pensions.
According to figures released today by the Pension Policy Institute (PPI), more than £26.6bn now sits in lost pension pots, an increase of 37% in recent years, with almost three million pots currently not matched to their owner. Meanwhile the Government predict that there could be around 50 million dormant and lost pensions by 2050.
“People should act now to track down their hard-earned money which could be sitting in missing pension pots.
“The prime causes for losing track of pensions are people changing jobs and or address but failing to notify their pension provider, meaning many people are in danger of missing out on significant sums of money.
“Research shows that while 89% of people who move home inform their GP or dentist, only one in 25 people would automatically think of letting their pension provider know, meaning many contact details are out of date.
“With each lost pot, people are losing track of their hard-earned money. An added problem is that these pots may be languishing in underperforming schemes, so it really is worthwhile taking a bit of time to try to track these down.
“This year’s National Pension Tracing Day coincides with the clocks going back, so it could be a very good way to take advantage of that extra hour.”
There are several steps you can take if you believe you may have a lost pension pot.
Peter explained that if a consumer is unsure of any previous pension provider, their first port of call should be the Pension Tracing Service. This is a free service which searches a database of more than 200,000 workplaces and personal pension schemes to try to find the contact details an individual may need.
He added: “If you do trace any missing pension pots, the next decision you will need to make is to either consolidate these or keep them as they are.
“This is really the time to take professional advice as while bringing together pension pots could provide a clearer picture of retirement assets, a pension consolidation is not always appropriate. For example, an individual may have a lost defined benefit plan and having a guaranteed income may suit the individual better. A defined contribution plan may also have valuable benefits such as a guaranteed annuity rate which could provide a high level of guaranteed income which would be lost if switched to another plan.
“A financial planner can listen to a consumer’s individual needs and objectives and then create a proposal using the pensions plans in the most appropriate and advantageous way.”
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