Around 3.3 million pension pots worth a collective £31billion are considered to be ‘lost’ – with one dad uncovering six forgotten pots after multiple job changes
Lee found a whopping £26,000 in lost pension pots
One man has revealed how he discovered £26,000 in six forgotten pension pots.
Approximately 3.3 million pension pots, collectively valued at a staggering £31billion, are deemed “lost”, according to the Pensions Policy Institute (PPI) charity.
The PPI categorises a pension as “lost” when the provider can’t get in touch with the saver who owns it. The surge has been attributed to the auto-enrolment scheme for workplace pensions.
As employers enrol employees over the age of 22 into a workplace pension, those who frequently change jobs could end up with multiple pots they may not be fully aware of.
This was precisely the situation for Lee, from Essex, who recently stumbled upon six lost pension pots totalling an overall £26,000.
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The 39-year-old revealed to The Mirror that he had worked in “numerous” different roles throughout his twenties across a variety of industries and sectors – including insurance, hospitality, and sales.
He said: “I think a lot of people hesitate to move jobs, and it doesn’t look good on your CV if you’re job hopping too much.
“But for me, one job led to another opportunity, then the experience of that job provided me the skills for another opportunity, and I’ve always been open to taking them.”
Lee revealed that the arrival of his son served as the “trigger point” that prompted him to investigate his pensions. He explained: “I had something like six or seven jobs over five years, so I knew there were some there. I just didn’t know everything else, so the actual important bits.
“I knew I had them, but it was never a thought to check them. It’s also quite daunting for a lot of people, and especially people like myself, when you’ve got more than the one pension, it becomes a bit of a task that you do put off.”
The father-of-one decided to use the app Penny after spotting it advertised on social media. Penny assists people in locating their lost savings pots and provides plans and pension investment options that can be managed via its app.
The service levies a 0.58% annual fee on the pension’s value, known as the Annual Management Charge (AMC).
Users will also incur the fund provider fee, which differs depending on the selected fund, and these charges can be viewed within the Penny app. The platform offers a selection of funds managed by either HSBC or Vanguard, two of the world’s largest fund managers.
It’s possible to trace lost pension pots yourself at no cost by contacting former employers and searching through old paperwork. The Government also provides a free Pension Tracing Service tool.
This service enables you to input an employer’s name to locate the contact details of their pension provider. Lee possessed some details about one of his missing pots but was unsure how to access it or determine its value.
He provided this information to Penny upon signing up, and naturally, this was the first to be traced. When the notification arrived, Lee was astonished to discover the pot held a substantial £8,000.
During that initial week, Penny successfully located several different pots for Lee, each containing vastly different sums. The smallest pot Lee discovered held just £2.50, whilst others contained £5,000.
Lee remarked: “I honestly didn’t expect to get anything from that job. I was there for such a short period of them, I didn’t think they would set me up a pension, but they did, and there it is.”
He continued: “I’ve never really thought about my pensions or retirement in any level of detail, I have never had an idea of a concrete plan, or even just a loose plan. But it felt good to see the money in front of me, and it’ll be there for me and my family.”
Lee says the funds have provided him with “a bit more comfort” as he has witnessed his own relatives worry about the expenses of their retirement.
He said: “The more I work and the older I get, ill just keep adding to it, so it’s reassuring that it’s there as a starting point.”
Lee has now consolidated all his pensions into a single pot. Always seek free pension advice on whether pension consolidating is right for you.