The total value of lost pension pots has risen 37 per cent to £26.6bn between 2018 and 2022, according to research from the Pensions Policy Institute (PPI), which has prompted renewed industry concern.

The research, sponsored by the Association of British Insurers (ABI) and Punter Southall Aspire (PS Aspire), revealed that there has also been a 73 per cent increase in the number of lost pension pots during this time, from an estimated 1.6m to over 2.8m.

Industry experts highlighted the “steep increase” in lost pension pots as demonstration of the urgency needed to address this problem, noting that with an average worth of £9,470, these lost pots could make a real difference to people’s retirement.

However, the reserach explained that, despite industry efforts, issues usually arise because people forget about pots built up in previous jobs, or they change their name or move house without telling their pension provider.

In light of this, industry organisations have focused on encouraging savers to take action to trace their lost pension pots, particularly ahead of National Pension Tracing Day on 31 October, with efforts already underway through the national Pension Attention engagement campaign.

Indeed, ABI director of policy, long-term savings and protection, Yvonne Braun, urged savers to "pay [their] pension some attention and use the resources available to track down any lost pots".

"It only takes a short amount of time to check what money you have built up and keep your records up to date," she stated.

Adding to this, PS Aspire managing director, Alan Morahan, stated: “The findings support our rationale for founding National Pension Tracing Day and show there is still much work to do to reunite people with lost pension savings.

"We hope that pension providers, pension schemes and employers will promote the importance of tracing lost pensions, with the message that doing so isn’t as difficult as some people might think.”

The government's Pension Tracing Service has been highlighted as one resource to help savers find lost pots, with a freedom of information request by Hargreaves Lansdown revealing that this service received over 232,000 calls between April 2017-August 2022.

However, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, noted that while this is a sizeable number, "it is a drop in the ocean" given the scale of the problem with potentially 2.8m missing pension pots.

She continued: “The number of lost pensions is growing at an alarming rate and risks undermining our retirement planning!

"The pandemic has acted as an accelerant to the trend, with more people shifting jobs and we now have an estimated £26.6bn in lost pension money in the system.

"Finding a lost pension could be the difference between struggling to make ends meet or being a bit more comfortable in retirement.

However, Morahan suggested that the introduction of pension dashboards could also help savers in future, with this research to therefore provide a benchmark from which to measure their success.

This was echoed by PPI policy analyst, John Upton, who noted that there was "cautious optimism among providers" around the introduction of pensions dashboards.

"Conducting this survey immediately before the launch of dashboards will allow us to evaluate their impact with further iterations of the survey," he added.

Legal & General managing director of workplace savings, Katharine Photiou, also drew attention to the role of pensions dashboards in helping savers to reunite with lost pots, agreeing that it "will be interesting to see what impact this has on unclaimed pots in future".

Broader systemic options may also need to be considered, however, as Standard Life workplace managing director, Gail Izat, suggested that one of the ways in which the issue of lost pots could be addressed is by looking at the ways in which people are accumulating multiple small pots via auto-enrolment.

"There’s been lots of debate in the industry over the best way to solve the issue and the government introduced a working group designed to look at options for consolidating these savings," he continued.

"There’s a good rationale for consolidating small pots as the more people have the greater their interest in the pension.

"At Standard Life, our preference is for the introduction of a ‘pot follows member’ approach whereby pensions under a certain size automatically transfer when people change jobs. If properly implemented, savers wouldn’t need to do anything, and it would be a really easy concept for everyone to understand.”

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