Is it worth the effort of tracking down my pension pots?<\/h3><\/div>![\"Danny](\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/3\/2020\/07\/Danny-Butler.jpg\")
<\/p>
Finder insurance expert Danny Butler<\/a> answers <\/em><\/div><\/div>Tracking down pension pots that have gone AWOL may seem like just another thing to add to your endless to-do list. It can be tempting to dismiss the idea, especially if (for example) you only worked for a company for a short time, and reckon your pension pot will be small.<\/p>
But every penny counts, and never more so than when you\u2019re saving towards a comfortable retirement. And don\u2019t forget that pensions are usually designed to increase in value over time, so what was once a small pot may be worth more than you think. According to the Association of British Insurers, as of 2020 there were an estimated 1.6 million unclaimed UK pension pots, worth a collective \u00a319.4 billion. That\u2019s nearly \u00a313,000 per pension pot.<\/p>
And if you have old paperwork, or with the help of pension tracing services, it shouldn\u2019t be too much hassle to make a few quick enquiries. Those lost pots could give your retirement income a valuable uplift.<\/p><\/div><\/div><\/div><\/article>
What should I do when I\u2019ve located my lost pensions?<\/h3>
Once you\u2019ve identified and contacted the providers of lost pensions, and they\u2019ve confirmed that you hold money with them, start by asking them a few questions. These might include:<\/p>
- What\u2019s the value of my pension pot and what\u2019s my retirement income likely to be?<\/strong> The provider may send you a pension statement with this information.<\/li>
- How is my pension invested, and what are the options for changing it?<\/strong> For example, you may want a lower or higher-risk approach, or to invest in more ethical funds<\/a>.<\/li>
- What fees and charges am I paying to run and manage my pension?<\/strong> If these are high, you might want to consider switching to a provider with lower charges. If so, ask what the fees are to transfer to a different scheme.<\/li>
- Are there any nominated beneficiaries on my account?<\/strong> These are the people or organisations that will receive any pension benefits if you die before receiving the pension. They may need updating if you set them up a long time ago and your situation has now changed.<\/li><\/ul>
If you\u2019ve got loads of small defined contribution pension pots that are a faff to manage, even with annual statements, you could consider consolidating them into a single scheme. Depending on the terms of each scheme, this could mean moving smaller pots into an existing, larger scheme. Alternatively, you could start a brand new personal pension scheme<\/a> to bring them all together.<\/p>Unless you\u2019re confident managing investments, it could be sensible to seek independent financial advice before taking this step though. It may need some thinking through to weigh up the pros and cons and choose the right scheme to move money into. And if you\u2019re lucky enough to have a final salary pension scheme, it\u2019s rarely a good idea to move money out of it. The downsides of doing so will almost certainly outweigh the benefits.<\/p>
Bottom line<\/h3>
<\/p>
Tracking down pension pots that have gone AWOL may seem like just another thing to add to your endless to-do list. It can be tempting to dismiss the idea, especially if (for example) you only worked for a company for a short time, and reckon your pension pot will be small.<\/p>
But every penny counts, and never more so than when you\u2019re saving towards a comfortable retirement. And don\u2019t forget that pensions are usually designed to increase in value over time, so what was once a small pot may be worth more than you think. According to the Association of British Insurers, as of 2020 there were an estimated 1.6 million unclaimed UK pension pots, worth a collective \u00a319.4 billion. That\u2019s nearly \u00a313,000 per pension pot.<\/p>
And if you have old paperwork, or with the help of pension tracing services, it shouldn\u2019t be too much hassle to make a few quick enquiries. Those lost pots could give your retirement income a valuable uplift.<\/p><\/div><\/div><\/div><\/article>
What should I do when I\u2019ve located my lost pensions?<\/h3>
Once you\u2019ve identified and contacted the providers of lost pensions, and they\u2019ve confirmed that you hold money with them, start by asking them a few questions. These might include:<\/p>
- What\u2019s the value of my pension pot and what\u2019s my retirement income likely to be?<\/strong> The provider may send you a pension statement with this information.<\/li>
- How is my pension invested, and what are the options for changing it?<\/strong> For example, you may want a lower or higher-risk approach, or to invest in more ethical funds<\/a>.<\/li>
- What fees and charges am I paying to run and manage my pension?<\/strong> If these are high, you might want to consider switching to a provider with lower charges. If so, ask what the fees are to transfer to a different scheme.<\/li>
- Are there any nominated beneficiaries on my account?<\/strong> These are the people or organisations that will receive any pension benefits if you die before receiving the pension. They may need updating if you set them up a long time ago and your situation has now changed.<\/li><\/ul>
If you\u2019ve got loads of small defined contribution pension pots that are a faff to manage, even with annual statements, you could consider consolidating them into a single scheme. Depending on the terms of each scheme, this could mean moving smaller pots into an existing, larger scheme. Alternatively, you could start a brand new personal pension scheme<\/a> to bring them all together.<\/p>
Unless you\u2019re confident managing investments, it could be sensible to seek independent financial advice before taking this step though. It may need some thinking through to weigh up the pros and cons and choose the right scheme to move money into. And if you\u2019re lucky enough to have a final salary pension scheme, it\u2019s rarely a good idea to move money out of it. The downsides of doing so will almost certainly outweigh the benefits.<\/p>
Bottom line<\/h3>
- How is my pension invested, and what are the options for changing it?<\/strong> For example, you may want a lower or higher-risk approach, or to invest in more ethical funds<\/a>.<\/li>