Do you know where your old pensions are?
We are not surprised by news this week that apparently one in five people surveyed by wealth management group Tilney had lost track of a pension.
The Department for Work and Pensions estimate that we could have up to 11 jobs throughout our working lives, which could mean 11 different pensions pots to keep track of – as well as a state pension. It estimates that around £400m in pension funds go unclaimed, a considerable amount of money.
This issue has seen the government make a commitment to developing a Pensions Dashboard which, in theory, should allow people to see just what pensions they have and where they are. Its success will depend on the collaboration and support of the pensions industry as every provider will have to eventually move their data about an individual onto the dashboard.
Although many are concerned about the potential for online fraud and security hacks, there is no doubt this is a good idea that should probably have been developed years ago. Pensions are complex and the pension landscape continues to evolve and because we are working and living longer, that average 11 jobs could easily rise to 15. Having an online portal to provide visibility of what is essentially your retirement income and wealth will come in very useful.
While the dashboard prototype is still being worked on, it won’t be delivered until 2019, and there are some things that individuals can be doing in the meantime to track down old pensions and keep track of your existing one. For example, one common reason for the £400m in unclaimed pension pots is that people just forget to inform providers of a change of address.
Write a timeline of your career history – if you left a specific employer before 1975 you will probably have received a refund of pension contributions. If you left a job between 1975 and 1988 you may have had a pension if you were over 26 and completed five years in the scheme – so this is one you may want to trace. If you left an employer after 1988 you will be entitled to a pension if you were with them for two years or more – another one to find.
Next time you have a spare couple of hours – check if you know where all your pension pots are. It could really make a difference to your retirement planning. Or, seek assistance from a professional and fully registered pensions advisor – you will have to pay for their help but it could be money well spent.
Also, don’t forget your State Pension – if you want to know how much you might get and when you can get it – then you can check this online at https://www.gov.uk/check-state-pension