Today nearly half (46%) of UK pension holders have lost track of some of their pension pots, according to new research from Scottish Widows. 

Robert Cochran
Senior Corporate Pension Specialist
15 November 2022
3 min read

Today nearly half (46%) of UK pension holders have lost track of some of their pension pots, according to new research from Scottish Widows. This means that – against the backdrop of the rising cost of living – millions of people across the country could right now be missing out on pension pots that are sat with their previous employers. 

Nowadays the average UK employee has 11 jobs over their lifetime. So while it’s understandable that savers may forget how many pension pots they’ve accrued over the years, they currently risk incurring unnecessary management fees – or even missing out on those savings altogether – at a time when higher inflation threatens to spoil their retirement plans. 

Moreover, savers who have kept track of their pension pots will be in a much better position to make informed retirement decisions when they get older. 


What’s stopping savers from consolidating their pension pots?

13% of people surveyed told us they did not know how to track down a pension pot from their previous job. And although savers currently have the option of combining their pensions, 16% told us they didn’t know how to go about tracing their lost money. 

In addition, when asked why they don’t plan to consolidate their pension pots, 36% of those surveyed told us they did not believe it would make a difference to their retirement income, while around 9% said that the process sounded too long and difficult. 

This lack of knowledge is particularly worrying. It means those people risk dealing with lots of disparate pension pots at retirement age, which is less practical than managing just one. 

By extension, then, the more pots a person has the longer and more inconvenient this process is likely to be. Dozens of different pensions with different employers or pension providers creates an unnecessary headache for retirees, and this will come at a time in life when things should ideally be less challenging for them.

"13% of people surveyed told us they did not know how to track down a pension pot from their previous job."


To complicate matters even further the number of workers with small pension pots of under £1,000 has skyrocketed in recent years. The Pensions Policy Institute (PPI) has predicted that the problem is only going to get worse, with the number of small pots set to triple to 27 million by 2035.

The recent PPI research on lost pension pots also indicated that the speed at which pension pots were being classified as lost was increasing with an extra 1.2 million pots having been ‘lost’ in the four year period between 2018 and 2022. That’s a 75% increase in lost pots in just four years.

While the UK Government’s proposed Pension Dashboards – set to begin rolling out from next year – will allow people to see all their pensions in one place, therefore alerting savers to any money they may have forgotten about, it won’t mitigate the issue of paying multiple fees across all their pension pots. 


Why pension auto-consolidation might be the answer

The secret to the roaring success of auto-enrolment was that it didn’t require people to take any action. A similar approach to auto-consolidation could be equally successful. It would reduce the number of savers paying multiple fees unnecessarily, and could also help the industry reduce costs, meaning the fees paid by savers would fall too.

While consolidation will not be the best option for all pots – final salary schemes and older schemes offering early access, for example – for many people consolidating their pensions into one pot would undoubtedly bring them much closer to their money; increasing their sense of ownership and control, and potentially setting them up for a better retirement.


The importance of digital platforms

It’s important that financial institutions, the pensions sector and the UK Government do more to promote the upcoming dashboard and other digital platforms like it.  As I say, at the time of writing the dashboard will not mitigate the issue of savers paying multiple fees - but it will offer savers a convenient way to monitor pension pots, nonetheless. 

Right now, though, many savers may be unaware that they don’t have to wait for the Pensions Dashboard. They can track their missing pots right away by using services such as the UK Government-backed website, MoneyHelper. Indeed, such digital platforms could prove to be extremely important for savers in the future. And they may provide the knowledge and confidence they need to be more engaged with their pension pots. 

“Over three quarters of savers said they would find it useful to have an online platform where they can view their pensions in one place.”

Looking ahead

Recently, our 2022 Retirement Report showed that the rising cost of living was impacting various social groups in different ways. Given this,, Scottish Widows is offering mental health and wellbeing support to people who may be struggling with financial difficulties alongside its regular budgeting tools. The content, provided by Mental Health UK, aims to help savers to reduce stress and manage their finances, plus point them towards organisations that can help.

We know increasing pension contributions during rising inflation and higher energy bills simply isn’t an option. We’ve already called for the UK Government to gradually increase the statutory level of pension savings from 8% to12% of income as real wage growth returns and encourage those who can afford it to save at least 15%.

Today, we’re asking ministers and the wider financial industry to come together to amend the current system so that small pension pots are automatically consolidated. This should oust unnecessary fees, cut bureaucracy, plus make it easier for the UK’s 33 million pension holders to better monitor their retirement goals with just one large pension to worry about, plus create more comprehensive digital platforms so people can easily keep track of their retirement funds.

About the author Robert Cochran

Robert has lead the Scottish Widows Employer and Employee engagement teams – his team create messages and material for adviser, employer and employee Pension Seminars and Engagement Events. They meet thousands of employees each year and talk to them about pensions and because of this Robert is a zealot about simplifying pensions for people. Increasingly he and his team are working with LBG digital resources to simplify pensions within broader Financial Wellness for employees.

He appears regularly in print, on the radio and other media and speaks about pensions engagement, tech and data at industry conferences and over the years has had many interactions with policy makers.  He represented Scottish Widows as a founding partner in Pension Engagement Season and National Pension Tracing Day trying to make a real difference to people’s outcomes at retirement.

Robert also holds a Marketing and Finance degree.

Robert's background Read less

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