Millions of workers could be missing out on thousands of pounds
Millions of workers could be losing out on thousands of pounds in retirement income simply because they’ve misplaced old workplace pensions. If you’ve worked multiple jobs, there’s a good possibility you have a forgotten pension pot from a former employer, and locating it could enhance your retirement income without raising your monthly contributions.
Fresh research indicates many individuals lack confidence regarding their retirement finances. A survey of 2,000 adults by Opinium for Hargreaves Lansdown revealed only 26 per cent believe regular overseas travel is realistic in retirement.
While 49 per cent would like to support family financially, just 30 per cent think they’ll actually manage to. Only 34 per cent say they won’t need to worry about money – though 71 per cent believe they’ll at least be able to cover their bills.
As reported by the Daily Record, one of the simplest ways to improve your prospects is to ensure you’re not missing money you’ve already put aside.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “When people picture retirement, they often imagine travel, helping family and having the freedom to enjoy their hobbies. But for many, those plans risk remaining dreams rather than reality.
“The good news is most believe they’ll be able to cover their bills. The challenge is making sure you have enough set aside to enjoy the lifestyle you want – and that includes checking you haven’t lost track of an old pension.”
Why so many pensions go missing
If you’ve changed jobs several times, there’s a strong chance you’ve left behind small workplace pension pots.
Over time, those pots can grow thanks to investment returns and employer contributions. But if you don’t keep your details updated, paperwork goes astray and it becomes easy to forget they even exist.
That ‘small’ pension from 20 years ago could now be worth far more than you think.
How to track down a lost pension
The first step is using the government’s free Pension Tracing Service.
You’ll need either:
- The name of your old employer, or
- The name of the pension provider
The service won’t tell you whether you definitely have a pension or how much is in it. But it will give you contact details so you can get in touch and check.
It can take a bit of admin – but it could also uncover money you didn’t know you had.
Should you combine your pensions?
Once you’ve found all your pots, you may consider consolidating them into one place.
This can:
- Make them easier to manage
- Help you see your total retirement savings clearly
- Reduce paperwork
- Potentially cut fees
However, it’s important to check carefully before transferring.
Some older pensions come with valuable guarantees, such as guaranteed annuity rates. You could lose these if you move the money. There may also be exit fees.
If you’re unsure, regulated financial advice may be worth considering.
Five practical ways to boost your pension
Experts say small steps now can make a big difference later:
1. Increase contributions when your pay rises
- Don’t stick on the minimum auto-enrolment level forever. Even a 1% increase can grow significantly over decades.
2. Check for employer matching
- Some employers will increase their contributions if you increase yours – effectively free money.
3. Claim any missing tax relief
- Higher and additional-rate taxpayers may need to claim extra relief through self-assessment, depending on how their pension is set up.
4. Use your annual allowance
- Most people can contribute up to £60,000 a year (or 100% of earnings, whichever is lower) and receive tax relief.
5. Consider family contributions
- You can pay into a spouse’s or child’s pension, which also benefits from tax relief.
The bottom line
Most people believe they’ll cover their bills in retirement. That’s the minimum.
But if you want more than just scraping by – whether that’s travel, helping family or simply peace of mind – you need to take control now.
Tracking down a lost pension pot could be one of the simplest ways to increase your retirement income without earning an extra penny.
