BBC Morning Live consumer expert Rebecca Wilcox gave pensions advice (Image: BBC)
A BBC expert has issued a £9,470 pensions warning to workers saying that there is a good change there could be a big pot you’ve forgotten about. Figures suggest there are £31 billion in unclaimed pensions in the UK caused by people paying in for a few years, moving jobs, then forgetting about it.
The Pensions Policy Institute (PPI) shows savers across the UK are in danger of missing out on large sums of money and are being encouraged to act, with almost 3.3 million pots not currently claimed. The combination of people switching jobs more often and auto-enrolment becoming more commonplace is likely the cause of this increasing number of unclaimed pension pots.
Appearing on BBC Morning Live consumer expert Rebecca Wilcox explained: “What we mean by a lost pension, is when the pension provider can no longer get hold of the owner, and that can be for a multitude of reasons. It could be because you’ve moved house and you’ve not updated your contact details. It’s because you’ve changed employer.
“If you don’t update your contact details and you don’t tell the pension supplier, then you have a lost pot. And this is a massive deal because loads of people have lots of jobs, part-time jobs, and they don’t realize that they’re paid into at source.”
She explained that this is money people can access and use – and on average it amounts to a sizeable chunk of money. Ms Wilcox said: “There’s thought to be millions of lost pensions in the UK with the average amount being £9,470, which is a huge amount of money. and even small pensions, if it doesn’t, if it’s not that much, they could all add up over time and they’re just sitting there growing in value and we’re not getting access to them.”
In terms of tracing them, she explained that there is a free service. She said: ”The first one is a free one that the government has set up, which is a pension tracing service. It’s really simple. You put in as much detail as you can. So, if you know who your employer is, your old employer, what the pension company is, it can help reconnect you with it. The service is a bit limited. It won’t tell you if you definitely do have a pension with them and it won’t tell you how much it is, but it will give you all the contact details so you can then investigate yourself. So, it’s a really good starting point.
“There are lots of other free services out there, a couple of platforms. One of which I wanted to talk about was Gretel. You put a bit more information in and it gives you a bit more information. It’s a bit more of like a bespoke dating services for finding your pension. So, basically, it will tell you if you do have a pension and it may go as far as putting you in touch with them, but we what I want to say is neither of those are foolproof. Gretle, for instance, will update its search every four days.
”So, if it doesn’t tell you instantly, you may need to check back again. So I would really go back to paper I’m afraid and have a look at all your old paperwork, your pay slips. Never assume a pension’s too small to look for because they really do add up. And it’s really worth you having it, not letting it get lost in the ether.” Link for Gretel here. Government missing pensions service here.
It came as the Pensions Commission said figures show about 15 million people are thought to be under-saving for their retirement. The commission published an interim report on the state of retirement saving in the UK, warning that significant groups of people could face a severe cliff-edge when they retire.
Women, low and middle earners, and the self‑employed are among those who could be particularly at risk, according to the commission, which said the number of people under-saving for later life could reach 19 million without action.
Millions more people could also be at risk of becoming reliant on state support in retirement, the commission says. Many people do not have salary-based pensions to rely on in retirement, as these have become less common, and instead bear the risk of how much money they will end up with, based on factors such as contributions and the performance of funds.
Some groups of people are also left out of automatic enrolment into workplace pensions, such as those earning below the £10,000 earnings “trigger” in a job and people who are self-employed.
The Commission said just 4% (one in 25) of wholly self-employed workers are saving for retirement. The report said: “Given there is no automatic enrolment for the approximately four million self-employed workers in the UK, the inertia-based pension-saving system does not provide for many who need it most.”
Patrick Heath-Lay, chief executive for People’s Pension, said: “The next step will be for the Commission to bring together business, trade unions, the pension industry, and the public to develop a consensus view on further reform.”