The value of lost pension pots in the UK has risen by 60 per cent, or £12bn, since 2018, with around £31.1bn lying in unclaimed, inactive, or lost pension pots, research from the Pensions Policy Institute (PPI), sponsored by the Pension Attention campaign, has found.

Published ahead of National Pension Tracing Day, the analysis showed that many savers across the UK are in danger of missing out on large sums of money, with almost 3.3 million pots currently unclaimed.

The report argued that these lost pensions, which are now worth an average of £9,470 – rising to £13,620 amongst the aged 55–75 cohort – could make a real difference to people’s retirement if they were reunited with their owners.  

Given this, the Pension Attention campaign urged savers to take control of their retirement and make use of free pension tracing tools, particularly ahead of National Pension Tracing Day on 27 October, which is dedicated to help individuals locate and trace their pension funds.

Pension Attention campaign spokesperson, Chris Blackwood, said: “If you can do one thing today, visit pensionattention.co.uk and use the pension tracing tools to find any lost pension pots. It only takes a few clicks, and you could substantially add to your pot.

"Additionally, you could also retrace your career steps, check old papers, look for any gaps in your pension history, and contact your provider to update your contact details.”

But industry experts also stressed the need to provide better support for savers, with Raindrop co-founder and CCO, Vivan Shridharani, arguing that “the millions of UK savers who have lost track of their pensions need support from financial providers if they’re to locate these lost pots and better prepare for their financial future”.

“The current pension tracing process is incredibly onerous and overly complicated so people are often unsure how to begin their search to locate lost pensions," Shridharani said, "savers desperately need a simple pension finding solution that finds lost pots and supports with consolidation otherwise they are at risk of losing track of their retirement savings and impacting their future financial security."

Hargreaves Lansdown head of retirement analysis, Helen Morrissey, agreed, suggesting that while pensions dashboards will help when it arrives, “it’s going to be a few years before we see it and we need actions that prevent the pensions going astray in the first place”.

“The government’s work on small pots will help by bringing them together in a default consolidator model, though this would not deal with the issue of larger pots going walkabout,” she continued.

The growing number of lost pots could also impact savers’ ability to plan for the future, as AJ Bell head of public policy, Rachel Vahey, warned that “millions of people could be in danger of facing an incomplete picture when it comes to their long-term financial planning, potentially missing out on thousands of pounds of disconnected pension money”.

“Knowing how much they have saved in a pension, and where that money is invested, is one of the most important steps savers can take to maintain a level of control over their future retirement,” she stated.

“Only by having this overall picture can pension savers work out how close they are to achieving their financial goals, and what action they may need to take to get their desired income and standard of living in later life.

“While we wait eagerly for dashboards to launch, there are important steps people can take today to track down their lost pensions and boost the overall value of their pension savings.”
 

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