A recent study by Scottish Widows reveals that over half of individuals (51%) now possess more than two workplace pension accounts. Among them, nearly one in ten (9%) are unsure of the total number of pension pots they hold, and 23% express intentions to merge their pension pots but lack the knowledge on how to proceed.
Michael Bryans, a 38-year-old music teacher from Dumfries, Scotland, was unaware of the value of his retirement savings when he was presented with the opportunity to consolidate his pensions after changing jobs. Initially holding two pension pots, one valued at £20,768 and the other at £412, Bryans now advocates for early retirement planning to others.
Data from the Pensions Policy Institute (PPI) indicates that approximately £31.1 billion remains unclaimed, inactive, or lost in pensions, with an average pot size of £9,469. Bryans shared his experience with The Mirror, stating that the consolidation process involved navigating through varying procedures of different pension funds, emphasizing the importance of persistence and timeliness in retirement planning.
Before opting for pension consolidation, seeking independent financial advice is recommended. Consolidating pensions streamlines administrative tasks by centralizing all pension funds but it is crucial to assess potential charges and exit fees associated with the old pension schemes compared to the new consolidated plan. Additionally, individuals should evaluate any advantages, such as guaranteed annuity rates, offered by their existing pension schemes.
Bryans continues to track down additional pension pots from his past part-time employment while studying and has recently set up a personal pension to supplement his retirement fund. Utilizing the Pension Tracing Service, individuals can access a database of over 200,000 workplace and personal pension schemes to identify potential funds, although contacting the pension administrators directly is necessary to retrieve specific account details.
Employers or services like Pension Wise, a government initiative offering free pension guidance, can assist individuals in obtaining accurate pension information. Notably, The Mirror previously reported on a mother who discovered £48,000 in an overlooked pension account, highlighting the importance of proactively managing retirement savings.