A pension is one of the biggest investments most people will ever make. However, a YouGov survey, commissioned by the National Pension Tracing Day campaign, reveals that while 95% of Britons who’ve owned a car can recall the model and brand of their first motor, less than half (44%) can remember the company that provided their first pension.
Lost pensions – a growing Issue
The survey of over 2,000 people also reveals a concerning trend in the management of pension pots.
A significant 78% of respondents who have a pension plan have accumulated between 1 to 3 pension pots in total, with 6% having 4-6 pots. However, 16% don’t even remember how many pensions they have.
This lack of awareness could be contributing to the growing number of unclaimed pensions, which has surged by over a third to approximately £27 billion since 2018.[i]
The National Pension Tracing Day campaign aims to change this and reunite people with their lost pensions.
Alan Morahan, Chief Commercial Officer at Punter Southall, said: “The fact nearly everyone can remember their first car but not their first pension supports what most of us already know: making people more interested in their pensions is really tough, even if it means finding thousands of pounds you didn’t know about. Around one in 20 people in the UK may have lost pensions, estimated to be worth on average £9,500 each and finding them could make a significant difference to their retirement.”
Unclaimed Wealth
Despite the potential financial windfall, a staggering 86 per cent of respondents with a pension plan have not traced a lost pension. Age may be a factor, but with people not saving enough for later life, it’s one more thing people can do for themselves.
The research also found that of those British people who had/ have a pension plan:
- 41% have less than £50,000 in their pensions.
- Only 9% have between £50,000 to £100,000 saved.
- 13% have more than £100,000.
- 37% either couldn’t recall their savings or preferred not to tell us.
Interestingly, 48% of respondents who have a pension plan and who are working or retired, feel confident about saving enough for retirement which could be misplaced confidence, as the figures contrast sharply with Standard Life’s analysis of the PLSA’s Retirement Living Standards[ii] on the amount of money needed for people to achieve a comfortable retirement.
According to Standard Life, to attain a minimum living standard, individuals should amass around £50,000, while a moderate retirement standard requires roughly £285,000. For a comfortable retirement, the goal is approximately £530,000.
Cost-of-living impacting retirement plans
YouGov also found that the escalating cost of living is already being felt.
Of those whose retirement plans have been affected by the increase in the cost of living, 39% said they now need to continue working for as long as possible, a quarter (26%) believe they won’t be able to afford to retire, and another 25 per cent had wanted to retire early but now find it financially out of reach.
One remedy for boosting retirement funds is to trace and recover misplaced pensions, a solution that many overlook, with 45% surveyed saying they wouldn’t know who to contact or where to start their search, while others cited a lack of time or complexity as barriers.
The unsung solution: Government’s Pension Tracing Service
Remarkably, 83% of respondents were unaware of the government’s pension tracing service, a resource designed to assist individuals in locating lost pensions.
However, when asked what they would do with if they found £9,500, they said:
- 43% would put the money into a savings account.
- 22% would use the money to fund a better retirement.
- 20% would allocate the money towards paying their bills/ debt.
- 14% would set it aside for later-life care.
Alan said: “The survey showed that when people do uncover a forgotten pot, most opt to save it. In tough times, it’s encouraging that people still want to put by what they can for later life because, as we’ve shown, most will not have enough for retirement.
We urge people to think back and use our simple checklist to see if they might have overlooked a pension. With approximately £27 billion waiting to be claimed, it is a concrete opportunity.”
National Pension Tracing Day
National Pension Tracing Day, is a cross-industry campaign created by Punter Southall, and is supported by Aegon, Aviva, Hargreaves Lansdown, Legal & General, Royal London, Scottish Widows, Smart Pension, Standard Life, and The People’s Pension. NPTD works in association with the Pension Attention campaign.
Case study – Ceri Hatton
How tracking down six lost pensions helped me to move house
After reading about the billions tied up in forgotten pensions, Ceri Hatton cast his mind back to the jobs he’d had since starting work at 17.
Now 61, he went back over his working life and was eventually reunited with six pensions he had overlooked after using the government’s pension tracing service.
He was able to cash them in and put £8,000 towards moving house.
Ceri, who lives in Bridgwater in Somerset, said he found four pensions while the further two were identified after pension companies got in touch.
He said: “I was considering slowing down for my retirement and read about unclaimed pensions and ended up finding four pensions and two found me! They were all for quite small amounts so I cashed them in and ended up with around £8,000.
“Whilst this amount wasn’t life changing it was still a welcome surprise to receive cash I hadn’t been expecting and it’s enabled me to move house. It’s also made me realise just how important it is to keep track of these things and every week I now keep an eye on my other pensions and how they are performing.
“I found the whole experience very easy. Pension companies want you to have your money and I felt the whole journey was very positive. Everyone involved was very helpful. I’d recommend that anyone, especially those nearing retirement age who have been working all their lives, to check if they have lost a pension.
“I had worked for several companies as well as being self-employed over the years and it’s so easy to forget what you have and for that money just to disappear. I plan to retire in a few years and this little bit extra has given my finances a little extra boost.”
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[i] [ii] https://www.pensionspolicyinstitute.org.uk/sponsor-research/research-reports/2022/2022-10-27-briefing-note-134-lost-pensions-2022-what-s-the-scale-and-impact/
[ii] https://www.standardlife.co.uk/about/press-releases/plsa-retirement-living-standards#:~:text=Assuming%20a%20full%20state%20pension%20is%20received%2C%20a%20retiree%20would,pot%20of%20around%20%C2%A3530%2C000.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2066 adults. Fieldwork was undertaken between 15th – 18th September 2023. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).