Research from Aviva has revealed the extent to which pension policies are being forgotten. A survey of almost ten thousand people who hold a pension has revealed that just under one in eight (13%) admitted they have at least one pension that they had forgotten about. This is equal to more than 2.5 million pension policies currently sitting in the back of people’s minds.
Among those with a forgotten pension, the majority believe they have misplaced one pot (77%), although 17% think they have forgotten about two and 6% have forgotten three or more.
According to Government figures, there is an estimated £400m in unclaimed pension savings. At the same time, almost three in five (59%) UK adults are worried about not having enough money to last them in retirement.
Although tracking down a lost pension can provide a valuable boost to retirement income, those who delay could receive a smaller amount than expected. Forgotten pensions may have been subject to charges and not invested in the best way suited to the policyholder, making it worth less than it would have been if it was actively managed.
Andy Curran, from Aviva, said:
“It’s unsurprising that so many people have pensions they have forgotten about. The ‘job for life’ is now a distant memory with people much more likely to change employer on a regular basis. With auto-enrolment doing such a great job of getting more people saving for retirement, we are likely to see the number of pension pots that people hold increase further as each time a person gets a new job they get a new workplace pension. This is why Aviva is now working to help create a pensions dashboard – a platform where people will be able to see all their pensions in one place.
“People need to be aware of the potential risks of having a number of different pension pots with small amounts of money in each. It’s likely that there will still be charges taken out of those pots for their management and administration and that can have implications if you are no longer contributing into them.
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