Aegon has recently found that 64% of people have more than one pension pot and, of that 64%, 22% have lost track of one or all of their pensions.
The figures published in the report means that over seven million people have potentially misplaced some of their retirement savings, highlighting the challenge of a broader trend towards a career involving an average of 11 jobs and the difficulty of keeping tabs on workplace savings.
However, the recent survey discovered an improvement in pension awareness in the last two years, with nearly a 10% fall in the number of people not knowing the value of their pensions from 39% to 30%.
Aegon head of pensions Kate Smith said: “It’s very hard to plan for retirement without a full view of your savings and an understanding of what your state pension entitlement is likely to be.
“So it’s concerning that the number of people who have lost track of their pensions has increased slightly. Without the bigger picture people might be setting themselves up for a retirement fall without a clear idea of what their savings are worth. Nowadays the vast majority of jobs come with a pension and as people frequently change jobs it’s all too easy to lose track of your pensions, especially if they are small.”
In a bid to combat the challenge of losing track of multiple pension pots, Aegon has suggested that savers consolidate their savings with one provider. However, the research found that only 27% of people would be interested in this method.
The most common reason for not consolidating pension pots was because savers claimed they did not want “all their eggs in one basket”, representing 46% of respondents. A further 27% of people said that they were not aware of the benefits of moving all their pensions.
“Pension consolidation won’t be right for everyone, there are merits to not keeping all your eggs in one basket. And some older style pensions will have valuable benefits which may be lost on transfer. It’s notoriously difficult for people to keep track of small pension pots, particularly at the beginning of someone’s working life. Consolidation of small auto-enrolment pots along the way will help people keep track of these,” Smith added.
“Looking to the future, the launch of a pension dashboard in 2019 should simplify the process of finding lost pensions, and has the additional bonus of seeing all your pensions, including the State pension, in one place. The hope is that by making all their pensions more visible people will gradually become more interested in pensions, and in time start to make more active decisions to start to get them ready for retirement.”
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