Recent research suggests that almost a quarter of all UK adults under 55 have lost track of a pension, with the total number of unclaimed pension pots reaching £37 billion.
According to the research, people aged between 25 and 34 are most likely to have lost track of a pension, with 29 per cent believing they have lost track of a pension and a further 10 per cent saying they were not sure if they had or not.
With an estimated total of 1.6 million pension pots currently missing in the UK, the average pension pot value is valued at £23,000 each. For those able to locate a forgotten pension pot, this meant they were on average £23,000 richer, which could allow them to retire two-and-a-half years earlier.
The research also found regional variations, with people living in more affluent areas more likely to lose more money if they lost track of their pensions. For example, those living in areas such as Twickenham or Harrogate enjoy average pension pots of more than £40,000, so would suffer more if they ‘mislaid’ a pension.
The research also revealed the regions with the highest total funds across all residents in missing pensions, with Birmingham topping the list at £5.3 million relocated across 229 pension pots.
As one of the report’s authors commented, with auto-enrolment and the fact that people are working longer, people have more pensions than ever to keep track of.
They added that it is important people know where their pensions are, not just so they can access it a retirement, but also because they can make positive changes to their pensions pre-retirement, such as consolidating their pensions into a cheaper, well-invested plan.