The total value of pension pots that have been “lost” has risen by £7.2bn over the last four years, new data published by the Pensions Policy Institute (PPI) has revealed.

Figures show that the value of these pension pots has climbed from £19.4bn since 2018 to stand at £26.6bn in 2022.

The PPI figures have also highlighted that the number of lost pensions has increased by 73% during this period, with large numbers of relatively small funds found to have gone missing.

Despite this, the estimated average value of lost pension pots still currently sits at £9,470.

Head of retirement policy at AJ Bell, Tom Selby, said that the success of automatic enrolment, in getting millions of people saving something for retirement, has also “exacerbated” the problem of lost pension pots.

“The combination of people switching jobs regularly – around 11 times over the course of a lifetime according to some estimates – and auto-enrolment is creating a vast and hugely valuable sea of retirement money that has become disconnected from its owners,” Selby commented.

“The pandemic is likely to have spurred an acceleration in career moves over the last four years, driving a £7.2bn surge in the estimated value of lost pensions.

“There is also some evidence that more people have been moving house since 2018, with the proportion of people having lived in the same house for more than 30 years dropping from 16.6% to 13.1% during that period. Moving house is another key reason why people lose touch with their pensions.”

Selby went on to highlight the role that Pensions Dashboards is expected to make in helping savers to locate old pots and make it easier to combine pensions.

He added: “Ensuring pensions are easy to track and combine is absolutely crucial if we are to ensure more people make the most of their hard-earned retirement pot. Pensions Dashboards, which will eventually allow savers to see all their pensions in one place, online, represent an important next step in addressing this challenge.”

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