Why tracking down your pensions could reel in tens of thousands of pounds: Sarah Coles

I realise I’m alone in this, and normal people couldn’t give two hoots about Bug Busting Day (31 October since you ask) or National Sandwich Day (3rd November but only in the US sadly). But there is one day worth paying some attention to, because it could leave you substantially better off: Pension Tracing Awareness Day on 30 October this year.

You don’t have to save your enthusiasm for a single day either, because tracking down a pension is the kind of enormously rewarding activity that could repay tens of thousands of pounds whenever you get stuck in. Our research shows that almost a quarter of people have lost track of a pension (23 per cent) and another fifth aren’t sure (20 per cent). The younger you are, the more likely this is – with 43 per cent of people aged 18-34 admitting that a pension has gone missing.

It’s easy for this to happen. Now that we have automatic enrolment into workplace pensions, an awful lot of people will build up a separate pension pot everywhere they work. Over the years we’re likely to work for around 11 employers, so we could be leaving endless pensions in our wake.

We need to remember every one of them whenever we move house, and contact them to change our address. This isn’t always at the top of the to-do list: according to the Association of British Insurers, only one in 25 people think to let their pension provider know when they move house. So it’s easy to see how we have lost track of 2.8m pension pots, worth a total of £26.6bn, according to the Pensions Policy Institute. In fact, they say we’ve lost another £7bn in the past four years alone.

We can’t afford to overlook any potential retirement income, so it’s worth going through the process of finding lost pensions.

Step one is to dig out any old paperwork. See if you have anything from any of your old private or workplace pension providers tucked away in drawers around the house. For personal pensions, you can also check your bank statements, which may show who you were making contributions to.

For workplace pensions, if there’s nothing forthcoming, try to wrack your brain for the names of your former employers. Get together everything you can – ideally the name of the company, their address, or any other contact details. You can try searching on the Companies House website to see if their details are on there. Then get in touch and ask about the pension scheme they offered when you were there, and who the pension company or administrators were. If the company has since disappeared, don’t forget old colleagues. A quick hunt on LinkedIn might reveal where they are now, and they may have kept more of their paperwork.

If you had a defined benefit or final salary pension, and the employer has gone under, the scheme may have been taken over by the Pension Protection Fund. You can check a list of the schemes the PPF is looking after on its website.

If you’re drawing a blank with either workplace or personal pensions, you can try the government’s free pension tracing service. You can track them down online Find pension contact details - GOV.UK (www.gov.uk) or call them on 0800 731 0193. If the Pension Tracing Service comes up with nothing, you could also try HMRC. If you were contracted out of the State Second Pension in the past through a workplace scheme, the taxman may have details.

In some cases, there will be nothing to find. Depending on the rules in place at the time, you may not have joined the scheme – before the advent of automatic enrolment (phased in from 2012) you had to make an active choice to join.

Even if you have a pension certificate, it may not mean you have a pension. If, for example, you left an employer before 1975, you may have had pension contributions refunded. If you left between then and 1988, and you had been there for less than five years, you may have had them refunded too. If you left after 1988 and were there for less than two years, you may have had contributions refunded – although if you were there for longer and definitely opted into the scheme, you should be entitled to something

If you find something, contact the pension company direct and ask them to track down your money. Then update your contact details, and make a decision about what to do with the pension. It’s worth considering whether it makes sense to bring at least some of your pensions together to make them easier to keep an eye on in future.

Before you do this, you need to check whether there are any features on your pensions that mean you might lose out on valuable benefits or have to pay out too much money if you decide to consolidate. For instance, older policies might incur expensive exit fees if you try and move them, or they may have attractive terms like guaranteed annuity rates.

If you end up with more than one pension, you’ll need to keep an eye on all of them, so add it to your to-do list when you move house. It’s also worth getting post redirected for a full year, so that annual statements of any pensions you have forgotten will make their way to you and remind you to change your address.

Tracking down a pension isn’t always straightforward, and if your employer no longer exists it can be positively frustrating. However, if there are tens of thousands of pounds waiting for you to stumble across, then surely it’s worth giving it a go.

This week the Office for National Statistics released figures on how many of us are struggling with energy bills, rent or the mortgage. Overall 45 per cent of us found it difficult to afford energy bills between June and September, while 30 per cent found it hard to afford the rent or mortgage.

Unsurprisingly, the lower your income, the more likely you are to struggle. It’s one reason why 72 per cent of those on prepayment meters found it difficult to pay their energy bill. However, renters face major struggles too: 60 per cent found it difficult to pay the energy bill and 39 per cent struggled with the rent, compared with 43 per cent and 23 per cent of those with a mortgage.

This owes something to the fact that rent makes up a bigger chunk of your spending. The report found that in 2021 people with a mortgage paid an average of 16 per cent of their household income on the mortgage while renters paid an average of 23 per cent.

Renters are also exposed to rises in housing costs more quickly. The rapidly falling number of properties available to rent, coupled with escalating numbers of tenants, means that rents have been soaring in recent months, so annual renewals have been expensive. Meanwhile, those who pay a mortgage and are on a fixed rate are protected from price rises for the length of their fix – typically two or five years. For them, there’s a nasty shock lying in wait when they need to remortgage, but in the interim their bills feel marginally more manageable.

Sarah Coles is a senior personal finance analyst and podcast host for Switch Your Money On Hargreaves Lansdown