More than a third of people across the UK have more than one workplace or private pension.
New research conducted by Opinium on behalf of Hargreaves Lansdown indicates that 32 per cent of people across the UK have at least two workplace or private pensions, while one in four (24%) respondents said they have three or more retirement savings pots.
However, some 4 per cent of people don’t know how many pensions they have – or with whom – something Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns could have a major impact on your income in later life.
If you don’t track them down, you risk missing out on thousands of pounds in lost retirement income which could be crucial as the State Pension age is set to start rising to 67 from April with a further rise from 67 to 68 set to be implemented between 2044 and 2046.
READ MORE: State Pension age set to rise in April for people born in specific yearsREAD MORE: Retirement expert shares simple ways to boost State Pension income
Ms Morrissey explained: “If your New Year’s resolution is to get financially fit, it’s worth paying some attention to your pensions. Many of us are juggling multiple retirement pots and there’s a real risk we could lose track of one or more and leave ourselves worse off in retirement.
“It’s easily done. If you don’t keep your contact details updated whenever you move house there’s a chance you could lose track of a pension from a previous employer.
“Our research shows that 32 per cent of people say they have two pensions, one in four say they have three or more and 4 per cent of people have no idea. It’s really important to keep track of what you have – research from the Pensions Policy Institute (PPI) shows there are more than 3.3m lost pension pots in the system.”
The retirement expert added that there are things you can do about it though.
She continued: “If you think you’ve lost track of a pension, you can contact the government’s Pension Tracing helpline. If you have the name of either the pension provider or employer, they can give you contact details so you can try and track it down.”
Looking further ahead, Ms Morrissey said that the incoming pensions dashboards will make it easier to keep track of what you have.
She explained: “Once you’ve got your pensions together, it might make sense to consolidate them. Having an overarching view of what you have can make a big difference to your retirement planning, because people tend to view one larger pot in a different way to several smaller ones, which they might be tempted to take as cash and spend.
“Taking the time to track down those pensions can really pay off. Calculations on Hargreaves Lansdown’s pension calculator shows that someone with a £60,000 pension at the age of 55 would be on track to accumulate a pension pot worth £125,000 by the age of 67.
“However, if they were to find a lost pension of £14,000 (average size of lost pension pot is £13,620 among 55-75 age group according to PPI) and consolidate it with their current pension they would have a pension worth £144,000 by the age of 67.”
However, Ms Morrissey added that it’s important to check the fine print before you decide to consolidate.
She said: “Make sure you aren’t leaving yourself open to expensive exit fees by consolidating or missing out on important benefits such as guaranteed annuity rates. It also rarely makes sense to transfer a final salary pension.
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