New research for Age UK shows 23% of UK adults have lost track of at least 1 pension, creating confusion and uncertainty over retirement saving plans.
A shift in working cultures and confusion around retirement planning is resulting in a pension ‘black hole’,(I suspect this is not only a UK problem but one that many countries are facing) with almost a quarter (23%) of UK adults stating they have lost track of at least one pension scheme – according to a new online poll for Age UK.
The poll, commissioned to understand more about people’s attitudes and plans for retirement, reveals that nearly a third (30%) of UK adults would try to trace a pension if they realised they had lost track of it. However, people are unsure about how and where to start hunting these pensions down.
23% of younger workers (25-34) have already worked for 5-6 employers – matching the average total for those aged over 65.
Reasons behind the UK’s missing pensions
• Nearly half (47%) of people missing pensions are unclear how they lost track of them
• 1 in 5 (20%) people missing pensions say they have lost their pension paperwork
• 10% blame the fact that they’ve moved jobs too many times to keep track of their pensions
• Younger generations are more likely to have lost track of a pension, with 37% of those aged 18-44 already having experienced this.
Lost pensions: a symptom of the times
The trend for adults to have a variety of employers over a lifetime, often resulting in multiple workplace pensions, is one of the root causes of the emerging pension ‘black hole’.
Tellingly, the average person over 65 has worked for around 6 (5.6) employers in total, while a quarter (23%) of those aged 25-34 have already worked for a similar number - yet have more than approximately 35 years left before they are likely to retire. This indicates that the younger generation will almost certainly have a variety of pension pots as they get older.
With the UK’s financial situation remaining precarious, the findings revealed a mixture of scepticism and uncertainty about long-term financial planning:
• 12% of those surveyed said they don’t think that there is any point as ‘nothing is guaranteed’
• 9% didn't know how to start out planning for retirement
• Worryingly, 24% of adults said that they were aware that they should be financially planning for their retirement, but currently can’t afford to
Tracing a pension
Age UK’s research shows that there is much confusion and uncertainty about how to trace a pension:
• If they realised that they’d lost a pension, nearly a quarter (23%) of potential pension-hunters would ask previous employers for help
• 15% would consult the government or tax office
• 11% would look online for advice
• 7% would turn to a friend or relative for help.
Commenting on the findings, Lucy Harmer, Head of Services at Age UK, said: 'It’s really important we all set aside time to keep on top of our personal admin, such as organising paperwork and keeping details of any financial products safe and secure. This is especially crucial for pensions as it may be some years down the line until they need to be accessed.
'With the number of jobs we have over a lifetime increasing, it’s likely that people will accumulate several small pension pots. In many cases these bring a less fruitful income in later life than one large pension pot.'
Lucy Harmer continued: 'While some measures are being taken by the Government to account for smaller pension pots likely to be created under automatic enrolment, existing pots that we may already have are not being accounted for. This makes it more important than ever that we keep on top of what we have already accumulated.
'We strongly advise people to seriously think about planning for retirement and the kind of lifestyle you want - it’s never too early.
Tips from Age UK on how to find a lost pension for more information if you live in England is here:
• Collect as much information about your previous employer as possible including names, the type of business it ran, previous addresses and scheme dates
• Search for any paperwork that you may have received with the pension
• Type of pension - try to remember if it was a workplace or personal pension
Source : Richard Brooks
Published on 11 April 2013
Published on 11 April 2013
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