One in five savers in the UK have three or more pension pots, while almost half (47 per cent) have two or more, according to research commissioned by Hargreaves Lansdown.

The study, conducted by Opinium, also found that less than a quarter (24 per cent) had ever transferred a pension.

Men were more likely to have transferred a pension, with 26 per cent of male respondents having done so, compared to 22 per cent of women.

However, Hargreaves Lansdown noted that it had seen a “big rise” in pension transfers during the most recent lockdown.

The firm attributed the increase in transfers to people using the time in lockdown to get to grips with their pension admin.

“The third lockdown finally achieved what years of guilt and wasted cash have failed to do - they persuaded more people to switch their pensions,” said Hargreaves Lansdown senior analyst, Nathan Long.

“Consolidating your pensions can be a brilliant move: it could reduce your fees, widen your investment choice, and reduce the amount of paperwork you need to need to keep on top of. It’s definitely not right for every situation, but one in four is a ridiculously low proportion, and leaves millions of people at risk of building up lots of small pots and losing track of them.

“The introduction of auto-enrolment means plenty of workers are signed up to their company scheme without really engaging with their pension. Typically, those pots are left where they are when the worker leaves and joins another company. They become a ‘deferred pension’, and the danger is they become a ‘lost pension’ by the time the worker retires.”

Long added that the biggest trend Hargreaves Lansdown had seen amongst its clients was those in their 50s consolidating their defined contribution (DC) pots to they can view all their pensions in one place.

“We think the number of savers in their 50s transferring their pensions will rise in the future,” he continued.

“Currently, a lot of people are simply cashing in small pension pots and/or relying on final salary schemes to fund their golden years. But as more and more of the workforce start retiring with larger DC pensions, we’ll see more consolidation of these savings.

“The squeezed middle (aged 35-54) have more pensions on average than any other age group. They’re no more likely to have transferred than their younger counterparts. There’s a risk people in this group are part of the ‘lost generation’: too young for defined benefit pensions but too old to have benefitted from auto-enrolment throughout their career.

“Their relatively low pension savings means they need to get to grips with pensions, but they may struggle to engage.”

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