How to find lost pensions

For most people, a key investment goal is to save enough for a comfortable retirement yet, according to government estimates, there is £400m lying in unclaimed pension accounts.¹ The Pension Tracing Service has launched a new website, under the auspices o

Most of us now work for more than one employer during our career. Baroness Altman, the former government pensions minister, says: “People have had on average 11 jobs during their working life, which can mean they have as many work place pensions to keep track of.” Indeed, with some companies changing their pension arrangements – for example by closing a scheme based on final salary and replacing it with one based on fixed contributions – it is possible to have a number of pensions with the same employer. It is no surprise, therefore, that the Pension Tracing Service is getting busier: it dealt with 169,000 requests in the year to March 2016, and requests have risen more than five-fold over the last decade.¹

Getting help

Of course, you may not need to use the tracing service: if you have kept documentation about the scheme, you can write directly to the pension scheme manager. Whatever method you use, Ian MacDonald, Head of Dundee Office at Brewin Dolphin, believes that gathering information about all your pensions is vital for financial planning. “The main benefit [of tracking down a pension] is that it can bring in funds you might otherwise be missing out on, some of them may have been started early in your career so the value could have increased considerably because of the length of time they have been invested.”

Changing pensions

Accessing details of all pensions will also give valuable information about their terms and investment policies. MacDonald says that the pension system has changed dramatically in recent years and savers could find some of their older schemes have high charges, are inflexible or offer a restricted range of fund choices. Last year’s ‘pension freedom’ reforms introduced greater flexibility on when and how pensions can be accessed but some older pensions may not be set up to take full advantage of this. Requesting help is straightforward and free: simply enter the details of past employers into the DWP’s website www.gov.uk/find-pension-contact-details and it will provide details of any pension schemes run by that company – although it will not say whether you were a member of the scheme. For that, you will need to contact the scheme provider, giving as much information about yourself and your service history as possible. MacDonald said: “It is important that your pension arrangements offer the facility to take advantage of the new flexible rules.” Assessing old pension schemes also gives the opportunity to review the investment policy of rediscovered pensions – something which too few savers do. Research from insurance company Aviva found that 15% of scheme members do not know the investment funds their pension is in, or have never reviewed them.2 Anyone with a number of pensions may consider amalgamating them into one pot. However, MacDonald says that this decision is not straightforward: different schemes may offer different death benefits, valuable guarantees may be lost, or there could be significant penalties for transferring the funds. That means it is essential to take professional advice before taking any decision. Whether or not you decide to amalgamate, getting information about all your pension pots will provide invaluable information for retirement planning. Your adviser will be able to supply annual statements incorporating all the schemes and can help to standardise the way in which benefit statements and valuations are produced to give a clearer picture of your finances.