Over half of individuals, accounting for 51%, now possess more than two workplace pension pots, as per recent findings from Scottish Widows. Approximately 9% of people are unaware of the number of workplace pension pots they hold, and 23% intend to merge their pension pots but are uncertain about the consolidation process.
Michael Bryans, a 38-year-old music teacher from Dumfries in Scotland, was uninformed about the value of his retirement savings when he had 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 advises others to contemplate their retirement strategies sooner rather than later.
Research by the Pensions Policy Institute reveals an estimated £31.1 billion residing in unclaimed, inactive, or lost pensions, with the average pension pot amounting to £9,469.
Bryans shared with The Mirror his experience, stating, “Around two years ago when I switched jobs, I learned about the option to consolidate some of my pensions, which initiated the process. It was somewhat complex as each pension fund had distinct procedures and protocols.”
He emphasized the importance of persistence and timely action in managing pensions, encouraging individuals to seek independent financial advice before consolidating pension pots. Consolidation streamlines administrative tasks by centralizing all pensions but necessitates a review of potential charges and exit fees in comparison to existing pensions.
Additionally, individuals should assess if any perks from current pensions, such as guaranteed annuity rates, would be forfeited by consolidating. Bryans continues to track down pension pots from past part-time work and has established a private pension to supplement his retirement savings.
The free Pension Tracing Service offers access to a database of over 200,000 workplace and personal pension schemes, providing contact details of providers for individuals to inquire about potential pension funds. Alternatively, individuals can seek information from their employers or utilize the Government service, Pension Wise, for free pension guidance.
Previously, The Mirror highlighted a case where a mother discovered £48,000 in a forgotten pension pot, underscoring the significance of monitoring and consolidating pension funds. Karin Ridgers, a 52-year-old PR director and mother to 17-year-old Callum, was unaware of the accumulated funds in her workplace pensions until recently.