The value of unclaimed savings in pension pots that people have lost track off could be as high as £19.4 billion – at least six times more than previously estimated.
That averages out at around £13,000 per lost pot, according to the Association of British Insurers (ABI).
The scale of the problem was revealed in a survey of firms representing around half of the Defined Contribution pensions market.
Research discovered 800,000 lost pensions worth an estimated £9.7 billion. Scale up those figures to the whole pensions market and you have around 1.6 million lost or unclaimed pension pots worth a staggering £19.4 billion.
The ABI said this figure could be even higher because the research by the Pensions Policy Institute (PPI) concentrated on the private DC pensions market and did not look into public sector or trust-based schemes run by employers.
Why is this figure so high? The higher frequency of job changes and home moves are the main reasons why people lose track of their pensions, the ABI said.
Insurance providers spend millions every year in an attempt to reunite savers with their lost or forgotten pots.
In 2017 savers were reunited with £1 billion of assets following more than 375,000 attempts to contact customers.
But the ABI said firms are unable to keep pace with a mobile workforce moving home and jobs more frequently than ever before and said the Government’s proposed Pensions Dashboard, due to go live in 2019, was vital to ensure savers could see all their pension assets, including the State Pension, in one place.
The Government has predicted that there could be as many as 50 million dormant and lost pensions by 2050.
Anyone considering accessing their pension benefits should seek professional advice, you may have more options that you think to make the most of your forgotten savings such as investing in your business.
Start by tracking down that lost or forgotten pension. The Department of Work and Pensions (DWP) Pension Tracing Service allows you to search a database of more than 320,000 pension scheme administrators.
What do you need to get started?
If you have a company pension you will need the name of your previous employer, their address and the dates you worked for the company.
You can also search for a lost or forgotten personal pension and will need the name of the insurance company, bank or building society that offered the scheme.
The pension tracing website
The Pension Advisory Service