27th October 2022
Half of workplace pension holders don’t know how many pots they possess
- Nearly half of workplace pension holders (46%) have no idea how many pension pots they hold with previous employers, as Scottish Widows urges people to engage with their pensions and track down ‘lost’ pots
- New insight from the Pension Policy Institute reveals a massive surge in lost pension pots in the UK, rising from 1.6 million to 2.8 million in just four years, with the total value estimated to be £26.6 billion
- A third of pension holders (34%) have no plans to consolidate their pots, with a similar amount saying they don’t think it will make a difference to their overall retirement income
Nearly half (46%) of workplace pension holders have no idea how many pension pots they hold with previous employers, according to new research conducted by Scottish Widows, ahead of National Pension Tracing Day (October 30th).
Of those who believe they’ve lost track of pension pots, 14 per cent said they’ve haven’t looked into it and 13 per cent revealed they don’t know how to track previous pension pots. In addition, a further one in ten (10%) didn’t know it was possible to track down previous pots and a small number (9%) said the process is too long and difficult.
In response to this, Scottish Widows is urging people to track down their missing pots, of which there could be as many as 2.8 million, with an estimated value of £26.6 billion according to recent research from the Pension Policy Institute.
Scottish Widows’ own research also reveals that just over a third (34%) of pension holders do not plan to consolidate their pots. A similar amount (36%) don’t think it will make a difference to their overall retirement income and almost a third (29%) revealed it’s not a current priority.
Of those that do see consolidating workplace pension pots as a priority (49%), nearly a fifth (16%) claim they don’t know how to go about it – highlighting the need for greater understanding amongst consumers and the importance of financial education.
Robert Cochran, Senior Corporate Pension Specialist at Scottish Widows, comments: “The latest statistics tell us that millions of workers run the risk of short-changing themselves and being unable to plan properly for their retirement, as they lose track of pension pots from previous employers. While the rollout of the Pension Dashboard programme will help in years to come, there is no need to wait. Workers can start tracking down their missing pots today using simple services such as the Government backed website, MoneyHelper.
“The first question we ask customers planning for retirement is ‘what have you got?’ and we found that over 10 per cent of those who completed a poll at our Pension Engagement Season event in the last month thought they had more than five separate pots. With pension consolidation potentially unlocking better spending power and simplifying planning, keeping track of your different pots is key to securing the financial future that works best for you and your family.”
Mind the knowledge gap
Encouragingly, many people appear eager to combat their lack of knowledge around pensions by seeking professional advice. More than half (52%) of those who plan to consolidate their pots plan to seek financial advice, with financial advisers (55%) being the most popular source for insight.
Seeking professional advice can help bridge any knowledge gaps, for example, more than two-thirds (69%) of those surveyed are unaware of where their pensions are invested, despite more than a third (37%) being keen to know. This figure rises to nearly half (49%) among 25-34-year-olds, suggesting pension engagement could become more popular in years to come.