Business

Pension fund details being lost by workers, Age UK says

Pension file
Image caption Changes mean that people will increasingly be signed up automatically to a workplace pension

People changing jobs are losing track of their clutch of workplace pension pots, making retirement planning more difficult, a charity has said.

Age UK said that nearly a quarter of those asked in a survey were unaware of the state of at least one scheme.

About a quarter of the under-35s have already worked for about five employers, a similar proportion to those aged 65 now.

A free service is provided by the government to trace lost pensions.

'Black hole'

The survey asked 2,300 people about the whereabouts of their pension pots.

About one in five of those who said that their pension details were missing blamed lost paperwork.

The charity said that the issue was creating a pensions "black hole".

"It is really important we all set aside time to keep on top of our personal admin, such as organising paperwork and keeping details of any financial products safe and secure," said Lucy Harmer, head of services at Age UK.

"This is especially crucial for pensions, as it may be some years down the line until they need to be accessed."

Tracing a pension

The problem may become increasingly acute as more and more workers are automatically enrolled into a workplace pension scheme, under a new government regime.

Some 10 million extra people could be signed up to an occupational pension with every new job as a result.

The government is planning to make it easier for workers who change jobs frequently to take any small pension pot with them and merge it with their next workplace pension.

The Department of Work and Pensions also runs a pension tracing service that locates lost pensions for individuals. It will then send details of the scheme provider's address to allow the policyholder to gather more information.

Malcolm McLean, a consultant at actuarial firm Barnett Waddingham, said: "Regular changes of jobs mean that individuals frequently accumulate a number of small pension pots which, at some point, they need to account for in preparation for retirement.

"Having located all the pensions, the individual should then consider bringing them together and purchasing a single annuity [a retirement income]. It would normally give them a better return for their money than seeking to obtain a number of small annuities from different pension pots.

"Getting the right type of annuity and shopping around for the best deal are also a must."

Related Internet links

The BBC is not responsible for the content of external Internet sites