28% of Brits believe they may have lost a pension or let one become dormant

6 Oct, 2020

More than a quarter (28%) of all British adults believe they may have lost track of one of their pensions or let it become dormant, according to a new study by Gretel, the free online service which helps people track down lost bank accounts, investments, life insurance and pensions.

Changing jobs is a common way that consumers can become disconnected from their company pension scheme, leaving them lost or classed as dormant.  When a worker moves from one company to another, they do not generally take their pension with them.

Gretel’s research has found that one in four (26%) of Brits have changed jobs 4-7 times in their adult life and a further 8% have changed jobs more than eight times.

The government is due to report back shortly on the dormant asset consultation which includes proposals to expand the dormant assets scheme to include new financial assets such as insurance, pensions and shares.  This would mean financial companies could channel funds from dormant savings and investments which meet the required level of customer inactivity (currently 15 years for banks)  towards good causes through an authorised reclaim fund (ARF).

Gretel estimates that 19.6 million people in the UK have become disconnected from financial services products and are sitting on dormant or unclaimed money with a collective value of over £50 billion1.  Lost or dormant pensions make up the greatest value with approximately £37 billion in total languishing in over 1.6 million lost or dormant pension accounts worth on average £23,125 per policy.

Duncan Stevens, Chief Executive of Gretel said: “Unfortunately it’s all too easy to become disconnected from a pension scheme.  For many workers it is something they don’t need to worry about until nearing retirement.  But few of us have a job for life now; our research shows that many of us change jobs multiple times during our working lives. Unless we actively consolidate our pension with each job move, our pension pots can quickly become lost or classed as dormant.  We estimate that there are over 1.6 million pension pots sat dormant with an average value of £23,125 – a sum that could have a huge financial impact on the retirements of the average person.”

In terms of those who believe they may have lost a pension or let one become dormant, Gretel’s research also found that:

  • four in 10 (42%) were aged 18-34 years
  • a third (32%) were aged 35-54 years
  • just 14% of those were aged 55 years
  • two-fifths (42%) are Londoners (the biggest by region)

Duncan Stevens continued: “At Gretel, we want to get dormant, lost and unclaimed money from savings, investments and pensions back into the hands of the consumer, where it belongs. Our belief is that consumers are entitled to receive all the money due to them and should not have to pay to get their own money back, nor face numerous complex barriers to access it. We are opening pre-registration now because this is a time of financial uncertainty for many and being reunited with forgotten money could make all the difference to some people.”

While many financial services companies have an obligation to reunite customers with their lost money, many only have part of a customer’s financial picture. The launch of Gretel reflects the recommendations of the Government’s Independent Commission on Dormant Assets which called for the extension of the scheme beyond banking to include the rest of the financial services industry and made it a priority for firms to attempt to reunify dormant assets with their rightful owners.

Once Gretel is fully launched consumers will be able to identify lost pots of money in old financial accounts in less than three minutes. Once lost accounts are flagged to the customer, Gretel provides an easy path for them to reclaim it.  Uniquely, once a customer has signed up with Gretel, the service will keep working for them to constantly look for lost monies and flag any new accounts as and when they are identified.

As Gretel prepares to launch and bring on banks, insurers and pension companies, consumers can log on and pre-register with Gretel by simply submitting their email address – www.gretel.co.uk.