As millions of retirement savers get on with their lives and move homes and jobs, many forget that they may have forgotten about the money sitting in ‘lost’ workplace pensions.
Once people could expect to spend their entire working life with a single employer, but now they chop-and-change jobs regularly in the fast-moving world of 21st century business.
The Association of British Insurers (ABI) keeps tabs on the numbers and reckons 1.6 million pensions worth £20 billion are in limbo waiting for someone to claim the cash.
Research shows just 1 in 25 of us remember to tell pension providers when we start a new job or move home – and the scale of the problem becomes apparent when on average during our lifetime we swap employers 11 times and change addresses eight times.
Employers and pension providers are to blame for the missing millions too.
It’s easy to lose track of customers when moving information between databases severing the link between savers and their cash.
Retirement savers reunited with their lost pots are an average £13,000 better off, which equates to a tax-free lump sum of £3,250 and a monthly income of just under £300.
Savers put away an average £61,897 to fund their retirement, so that ‘lost’ £13,000 boosts their pot to £75,000.
Government data shows the number of lost pensions is increasing with the total of unclaimed pots expected to swell to 50 million by 2050.
Pension providers work hard to reunite savers with their lost money. In 2017, they attempted to find 375,000 gone-aways and returned £1 billion of pension savings.
What is a lost pension?
Pension firms call missing savers ‘gone-aways’. Their retirement savings are frozen in ‘dormant accounts’.
Gone-aways can either lose or misplace a pension:
- A pension is lost when the chances of reuniting a pot with a saver is poor
- A pension is misplaced when the pension host believes they can track down a gone-away
If you have had a financial firm asking that you confirm your personal details, you are probably a ‘gone-away’ they want to find.
The contact may come from a provider you do not know, which means the company that set up your pension is now owned by someone else.
Some pension firms do not register missing customers as ‘gone-away’ until the age of 75. The pension is still considered active even if you have lost contact with the provider some years ago.
Is your pension really lost?
Some savers forget they gave up their rights to a pension and believe the cash is still sitting around waiting for them to claim.
If this is the case, they do not have any lost pension money.
Anyone with fewer than 24 months saving in to a workplace pension can ask for a refund of their personal contributions.
If you had a refund depends on when you left your employer:
- If you left before April 1975, your pension contributions were likely refunded, and you have no pension
- If you left between April 1975 and December 1985, you have a pension if you were aged 26 or over and have a five-year contribution history. If not, your pension contributions were likely refunded, and you have no pension
- If you left between January 1986 and April 1988, you have a pension if you paid into the scheme for five years, regardless of your age. If not, your pension contributions were likely refunded, and you have no pension
- If you left on or after 6 April 1988, you have a pension if you paid into the scheme for two years. If not, your pension contributions were likely refunded, and you have no pension
Becoming a lost pension detective
Searching your own records is the first step in becoming a lost pension detective.
You need to build a list of employers and dates you worked for them to uncover any missing pension cash.
You are looking for:
- Statements from pension companies – they are sent out every year
- Old bank statements or payslips that should also show if you made pension payments and to whom
- Look through your old emails and computer files as many pension firms contact savers online. Include the spam and bin folders in case the messages were misdirected
- If you keep in touch with former workmates, ask them about their pensions
What to ask your employer
If you are a DIY pension detective, the ABI posts a list of more than 140 pension firms online.
You can email or write to them.
The Money Advice Service has a free template letter you can download and use.
To help the pension firm reunite you with your savings, they will want to know:
- Your National Insurance number
- Date you started and left your job
- Date you joined and left the pension scheme
Using the Pension Tracing Service
The Pension Tracing Service is an online database of 242,000 workplace and personal pension schemes that aims to reunite retirement savers with their lost money.
Around 1.25 million database searches are carried out each year.
The search will not confirm if you have a lost pension or the value of the fund but will tell you who to contact to find out more.
Contacting the Pension Tracing Service offline
You can request the same information as the online query returns by phone or post:
- Call 0800 731 0193 or +44 (0)191 215 4491 from outside the country
- Textphone: 0800 731 0176
- Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 731 0193
The call centre opens Monday to Friday between 9.30am and 3.30pm (UK time)
Write to: The Pension Service 9, Mail Handling Site A, Wolverhampton WV98 1LU
Using the online Pension Tracing Service tool
- Click this link to start your search
- Select the pension type
If you choose an NHS, civil service, teacher, or Armed Forces pension, a contact list is displayed so you can get in touch with the administrators
If you choose ‘no’ the next screen asks you pick either a workplace or personal pension
Workplace pension searches
If you are looking for a workplace pension:
- Answer ‘yes’ if you know the name of the employer who set up your pension and search the database
- If the answer is ‘no’, the tool will ask the name of the workplace scheme and search the database
Personal pension searches
For personal pension searches you need to enter the name of the scheme
Pension Tracing Service returns no results
You cannot search the Pension Tracing Service if you do not know the name of your employer or pension scheme.
If this happens, try to contact the Pension Advisory Service for help.
If the employer running a workplace pension has ceased trading, the government’s Pension Protection Fund may have taken over the scheme.
Other places to look include the Unclaimed Assets Register
Each search costs £25 and only returns results from a limited number of providers compared with the Pension Tracing Service.
Another option is The Policy Detective, a free pension finding service, but you still need the name of the pension provider to make a search.
What if I find more than one pension?
If you uncover two or more pensions, you should look at combining them into a single pot is worthwhile.
As an expat, you can transfer the funds to the offshore Qualifying Recognised Overseas Pension Scheme (QROPS), which may offer tax and financial benefits an onshore UK pension cannot match.
Your options depend on factors like the size of your pots, where you live and your age.
How To Trace Money In A Lost UK Pension FAQ
Tracing a lost pension is easy if you know where to look.
The government’s free Pension Tracing Tool can unlock thousands of pounds in savings, so it’s always worth checking if you have forgotten a pension from years ago.
To help your search here are some of the most-asked questions about tracing a lost pension.
Paying to retrieve a lost pension depends on how you go about looking. There are plenty of free resources online and they are the same databases as paid-for services use.
Fees vary from a flat rate for a simple search to a percentage of the amount of money recovered.
If your employer was a company, try searching the Companies House database. This will say if the company closed, merged or changed names. If the company closed or changed hands, the pension may have gone to the Pension Protection Fund. If so, you can still unlock the cash by speaking to them.
The Pension Tracing Tool only covers UK pension schemes, and as QROPS are based offshore, they are unlikely to show up. HM Revenue & Customs keeps an up-to-date list of QROPS providers and their contact details, so writing to them may put you back in touch with your QROPS.
It could be a ‘gone away’ letter from a pension scheme that has taken over from your former employer. Check the sender to see if it’s a scam, if it’s not, provide the information they are looking for because it means you have some missing money.
It’s up to you. A search costs £25 and covers the data that is available for free from the Pension Tracing Service plus information about stocks, shares, bank accounts and the like. If you are only looking for a pension, try the Pension Tracing Service first.
If you have rights to money or benefits from the fund, you can trace and make a claim from your spouse’s pension.
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