By Daniel Hunter
A shift in working cultures and confusion around retirement planning is resulting in a pension ‘black hole’, with almost a quarter (23%) of UK adults stating they have lost track of at least one pension scheme — according to a new online poll for Age UK.
The poll, commissioned to understand more about people’s attitudes and plans for retirement, reveals that nearly a third (30%) of UK adults would try to trace a pension if they realised they had lost track of it. However, people are unsure about how and where to start hunting these pensions down.
Reasons behind the UK’s missing pensions:
- Nearly half of all missing pensions (47%) are simply ‘lost in the mists of time’
- 1 in 5 (20%) people missing pensions say they have lost their pension paperwork
- 10% blame the fact that they’ve moved jobs too many times to keep track of their pensions
- Younger generations are more likely to have lost track of a pension, with 37% of those aged 18-44 already having experienced this.
The trend for adults to have a variety of employers over a lifetime, often resulting in multiple work place pensions, is one of the root causes of the emerging pension ‘black hole’.
Tellingly, the average person over 65 has worked for around 6 (5.6) employers in total, while a quarter (23%) of those aged 25-34 have already worked for a similar number - yet have more than approximately 35 years left before they are likely to retire. This indicates that the younger generation will almost certainly have a variety of pension pots as they get older.
With the UK’s financial situation remaining precarious, the findings revealed a mixture of scepticism and uncertainty about long-term financial planning, with 12 per cent saying they don’t think that there is any point as ‘nothing is guaranteed’, and nine per cent not knowing how to start out planning for retirement.
Worryingly, 24% of adults said that they were aware that they should be financially planning for their retirement, but currently can’t afford to.
Age UK’s research shows that there is much confusion and uncertainty about how to trace a pension. If they realised that they’d lost a pension, nearly a quarter (23%) of potential pension-hunters would ask previous employers for help; 15% would consult the government or tax office; 11% would look online for advice; and seven per cent would turn to a friend or relative for help.
"It’s really important we all set aside time to keep on top of our personal admin, such as organising paperwork and keeping details of any financial products safe and secure. This is especially crucial for pensions as it may be some years down the line until they need to be accessed," Lucy Harmer, Head of Services at Age UK, said.
"With the number of jobs we have over a lifetime increasing, it’s likely that people will accumulate several small pension pots. In many cases these bring a less fruitful income in later life than one large pension pot.
"While some measures are being taken by the Government to account for smaller pension pots likely to be created under automatic enrolment, existing pots that we may already have are not being accounted for. This makes it more important than ever that we keep on top of what we have already accumulated.
"We strongly advise people to seriously think about planning for retirement and the kind of lifestyle you want - it’s never too early. At Age UK we have a range of information and services available to help with pension preparations, including a pension planner, help and guidance, as well as information on the state pension."
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