One in eight pension savers don’t see point of combining savings

Almost one in eight (13%) pension savers have said they don’t think it is “worth the hassle” to combine pensions, Moneyhub has found.

In new research by the data and payments platform, a further 14% said they prefer actively leaving their pension pots separate.

Moneyhub said that these attitudes run the risk of savers potentially leaving their retirement savings in poor yielding investments or forgetting a number of their pension pots altogether.

Recent research has shown that almost nine in 10 (88%) of individuals with workplace pensions have at lease one pension that remains unclaimed, and there is an estimated £26.6bn of lost pension pots in the UK.

The firm also stated that the challenges consumers face when trying to locate lost or old pensions and their overall lack of clarity around pensions, could be behind these numbers, with a further 8% unaware that they could combine their pensions into one.

It was found that 13% of pension savers have already consolidated their pensions, with a further 23% planning to do so in the future. The concept of consolidation was most popular with people aged between 25 and 34, with 16% already having done so, and a further 42% planning to.

Managing director at Moneyhub Personal Finance Technology, Mark Horwood-James, said: "Structural challenges within the UK pension market such as fragmentation and low consumer engagement are driving inefficiencies and undermining savers’ ability to achieve decent retirement savings. With workers having longer careers and numerous roles over the course of their working life, they are ending up with multiple pensions.

"The research is clear. There is a troubling inertia when it comes to consolidating multiple pots. Combining pensions into one can make it easier to manage; from having more choice over your investments to paying lower fees. The Government’s pensions dashboard will be a great milestone; it will however be the providers that embrace Open Finance technologies, like Moneyhub’s, alongside the dashboard, that will be the winners.

"They will be able to break down the barriers to engagement and ease the process of consolidating pension pots. Commercial dashboards will allow users to see their pensions alongside all their other financial products enabling them to have sight of the whole of their financial universe, make more informed financial decisions and take action, which in turn will create better later life financial outcomes."

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