Recovering a 'Lost' Pension
- TBA
- Jul 5, 2024
- 3 min read
Did you know that the average person will switch jobs 11 times during their career?
This means that we might accumulate 11 different pensions along the way. Over time, some pension plans might go defunct, companies might merge, or simply change their names, which could cause some trouble.
According to the Pensions Policy Institute, the amount of lost pension savings among UK taxpayers increased by 73% from £1.6 million to over £2.8 million between 2018 and 2022.
Currently, these lost pensions are valued at £26.6 billion. Where did these pensions go?
1. When might you ‘lose’ your pension?
There are various situation where you might ‘lose’ a pension, such as frequently changing employers or moving and forgetting to update your address—meaning you no longer receive annual pension statements.
In recent years, although many pension plans offer electronic statements, if there’s an issue with your email or you forget the login information for the pension company, finding it can become impossible.
Over the years, the rules governing pensions have continually changed. Therefore, whether you’ve accumulated a certain amount of pension and whether the pension plan is still valid depends on the period you worked.
Before April 1975
If you left an employer before April 1975, any contributions you made might have been refunded. Some pension plans didn’t require members to make regular contributions, so you might not be entitled to any pension benefits from that plan.
April 1975 to April 1988
If you left an employer between April 1975 and April 1988, were over 26 years old, and had worked for the employer for at least five years, the pension might have been preserved for you. If your service was less than five years, your contributions might have been refunded.
After April 1988
If you left an employer after April 1988, you might be entitled to some pension benefits provided you had worked there for at least two years.
2. How do I track a lost pension?
Lost pensions can include personal pensions or workplace pensions. You can track lost pensions through the following methods:
Contacting Previous Employers (for workplace pensions)
Contacting Pension Providers
Using Pension Tracing Services
Method 1: Contacting Previous Employers
Make a list of all past employers and check if you had a workplace pension with them. Most pension plans must send you an annual statement, which includes potential retirement income. Look for these documents to find the name of the employer, the pension plan, the administrator, or the provider’s details.
Method 2: Contacting Pension Providers
If you know the pension provider, contact them directly. Gather information such as the pension plan number, your date of birth, National Insurance number, and the dates the plan was established. Workplace pension plans might also need to know your dates of employment.
Method 3: Using Pension Tracing Services
If you cannot find your previous employer or pension provider, use the government’s free Pension Tracing Service. By entering the employer’s or pension provider’s name, the tracer will confirm the correct contact details. You can use the tracer online via the government’s website or call the Pension Tracing Service at 0800 731 0193.
Collect as much information as possible, including:
The name of previous employers or pension providers (required to start tracing)
Any previous names
Type of business
Whether the address has changed
When you joined the plan
The Pension Tracing Service will provide the contact details of the pension administrator or provider but will not give any information about the pension’s value. You will need to contact them to find out if you have a pension with them and its value.
If it’s difficult to find a defined benefit or final salary scheme, check the Pension Protection Fund (PPF) website. The PPF steps in to pay benefits when an employer can no longer meet its obligations.
3. How can I better manage my pensions?
If you have different pension arrangements, whether personal or workplace pensions, you can follow these simple steps to manage your retirement savings:
Understand the Basics
Most pension plans must send you an annual statement. If you think you haven’t received one, ask the provider for it.
Update Your Details Promptly
It’s your responsibility to inform your pension company of any personal changes. If you move and don’t update your address, your statements might go to the wrong place.
Nominate a Beneficiary
After you die, your pension typically becomes part of your estate. However, most pension plans allow anyone to inherit your pension. If you die without a will, your pension might not go to the person who needs it most. Update your pension provider(s) with details of your nominated beneficiaries to ensure that arrangements are in place.