Research carried out on behalf of the ABI, exposes the scale of the UK’s lost pension mountain. This is considered to be the largest study yet on the subject and the Pensions Policy Institute (PPI) had surveyed firms that represent around half of the private defined contribution pensions market. From this survey, the Pensions Policy Institute had found that 800,000 lost pensions which are estimated to be worth £9.7 billion. If scaled up to the whole market, this study estimates that there could be collectively around 1.6 million pension pots that would be worth £19.4 billion if they are unclaimed. This is the equivalent of nearly £13,000 per pension pot. However, as the research did not look into the lost pensions held in the public sector or the trust-based schemes, this figure is likely to be even higher.
Considerable efforts are made by insurance providers and they spend millions every year in order to try and reunite people with their forgotten or lost pensions. Just to put this into perspective, there were more than 375,000 attempts made to contact customers in 2017, which led to a total of £1 billion in assets being reunited with the rightful owners. However, firms are unable to keep up with a mobile workforce that moves homes and jobs more often. This is where a digital solution through the Pensions Dashboard is now more essential than ever. By having a digital solution, anyone would be able to see all of their pension savings together in a single place online, including their state pension.
In the UK, almost two-thirds of savers have more than one pension. With more people changing jobs and work patterns, this means that the number of people with multiple pensions will increase. Typically, people lose track of their pensions when moving home or changing jobs. On average, the regular person will have around 11 different jobs over the entire lifetime and they may move house an average of 8 times. These lost pensions are predicted to increase by the government. They predict that there may be as many as 50 million dormant pensions by 2050.
About the Author
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
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