The average Brit is likely to have six jobs in his or her lifetime, while millennials are on track for at least 12 (if not more) by the time they retire. As every company has its own workplace pension scheme, that means that you’ll be accumulating pensions at the same rate as your jobs.
Keeping up with that many pensions is a huge task, so it’s no wonder that the Association of British Insurers has estimated that there’s around £19 billion worth of lost pensions in the UK just because people have moved house!
There’s good news if you’ve lost track of your pension(s), because finding it can be relatively straightforward. But before you do anything else, it might be worth having a rummage through your very important but boring stack of papers. Whether you keep them stashed in a draw or neatly filed away, we all have a stack of papers like this that we mean to read and file at some point, so don’t beat yourself up.
I struck gold!
It’s definitely worth looking for old pensions, as I discovered last year. Having sorted the house and garden during lockdown, I finally turned to my finances, and discovered, to my amazement, a £150,000 pension pot! Yes, you read that right, £150,000!!! Let me tell you how.
In 2001, I joined a small firm and paid into the pension until 2007 when it was acquired by a multinational company and we joined their much bigger pension scheme. The original pension was never transferred, and I don’t remember anyone ever discussing what we should do with it and so it was left dormant.
I kept meaning to do something about it, but over time I forgot. I knew I had a stakeholder pension through Standard Life, but in my head, I hadn’t paid in very much into it, so it was small and worth no more than about £30,000. That’s not a figure to be sniffed at, of course, so I set about trying to find out and lockdown boredom gave me staying power.
The first inkling that my pot might be bigger than I thought it was, was when I was transferred to the Priority Plus team at Standard Life for large personal pensions. As you can see from the image below, my total contributions during the six years were £41,506, but the investment has grown by a whopping £109,792 — even though I stopped contributing in 2007 and fees have taken a bite out of my pension ever since.
So how did I establish such a large pot? There were three main factors. Firstly, I was young, naive and had time on my side so I stuck everything into equity. I knew a lot less then than I do now, but I spread my pension contributions between UK, European, US, Global and Emerging Market equity.
The second thing was that I selected passive investment funds (index-trackers), and finally, I left well alone. In the 19 years since I started this pension, we’ve had boom and bust years, but my pension remained invested throughout and it’s paid off handsomely.
How to find old pension funds
Hopefully, this story has inspired you to track down every pension and monitor them closely. There are several ways you can lose a pension:
- You know who the provider is but don’t know your policy number
- You don’t know the provider or your policy number
- You’re not sure who your old employers’ pension schemes were with
- Depending on which of the above category (or categories) you fall into, there is a way to track down your pension (or pensions).
Finding a lost pension when you know the provider
Normally, your pension provider will issue you an annual statement that comes through the post. These are very easy to file away for later, so if you’ve rifled through your drawers and found a pension statement, then that’s great news. This should be the case even if it is a lost pension that you no longer pay into.
Your policy number should be included in the letter, making accessing your pension a relatively straightforward process. However, if you know the pension provider but can’t find a statement, you may still be able to find your pension by contacting the provider. In this situation, they’ll ask you to provide some personal details and answer a few security questions to find your old, lost pension.
Finding a workplace pension
If you believe that you had a workplace pension — which is a pension set up by your employer — but you don’t know who the provider is, then your first port of call should be your employer. Even if you haven’t worked somewhere for years, they should have kept a record of who their pension provider was when you worked there.
It’s important when asking your previous employer to include the dates you started working and the dates you finished, as they may have changed provider during this time and your first pension may not have been transferred when the second was opened.
When you know who the pension provider is, simply follow the same steps as above.
Finding an unknown pension
Let’s face it, not every employer keeps immaculate records. They may have even stopped trading, which can make asking them about your pension impossible. But, luckily, there’s still another card you can play… The Pension Tracing Service.
This is a government service that can help you find your lost workplace or personal pension. You’ll just need to know the name of the company or the name of your pension provider if you’ve lost a personal pension.
This free service will quickly check over 200,000 workplace and personal pension schemes to try and find your pension. If you do it online and get a ‘no matching results’ page, then you could try phoning them on 0800 731 0193 and see if you have better results that way.
When you know the name of your provider, you’ll need to follow the steps laid out above to find your actual pension policy.
What to do when you’ve found your pension?
Once you’ve got your hands on your pension, there are a few options available to you. The first is to simply keep track of it — after all, you took the effort to find it once, and you don’t want to do that again! The other option is to bring all your lost pensions together in one pension. You could open a personal pension, which you can take with you even if you change employers.
Having all your pensions in one place doesn’t just make it easier to track your pensions. You may also be able to save money on management fees and could have more control over what your pension is invested in. I have consolidated all my pensions into a single Sipp (self-invested personal pension).
My next blog will be about the pros and cons of consolidating pensions.