A recent study by Scottish Widows revealed that more than half of individuals now possess more than two workplace pension funds. Surprisingly, nearly 10% of people are unsure of the number of pension pots they have, with 23% intending to merge their pots but uncertain about how to go about it.
Michael Bryans, a 38-year-old music educator from Dumfries, Scotland, was unaware of the total amount in his retirement pots until he had the opportunity to consolidate them when changing jobs. Bryans had two pension pots – one valued at £20,768 and the other at £412 – prompting him to advise others to start contemplating their retirement plans early.
According to data from the Pensions Policy Institute (PPI), approximately £31.1 billion remains unclaimed, inactive, or lost in pensions, with the average pot size being £9,469. Bryans recommended being persistent and prioritizing pension consolidation sooner rather than later, based on his experience of merging three different pensions, each with its own procedures and processes.
Before consolidating pension funds, seeking impartial financial advice is crucial. While consolidating offers the convenience of having all pensions in one place, it is essential to compare charges and potential exit fees of old pensions against the new one. Additionally, individuals should assess if they would lose out on any benefits, such as guaranteed annuity rates, by consolidating.
Bryans continues to track down pension pots from his past part-time employment and has initiated a private pension, contributing regularly to enhance his retirement fund. The free Pension Tracing Service enables individuals to search a database of over 200,000 workplace and personal pension schemes for contact details of providers, necessitating direct communication with administrators for fund verification.
Alternatively, individuals can obtain pension details from employers or access guidance and advice through the Government’s Pension Wise service. The Mirror previously highlighted a case where a mother discovered £48,000 in a forgotten pension pot, echoing the experience of PR director Karin Ridgers, 52, who was unaware of the accumulated funds in her workplace pensions over the years.