How to help employees bring old pensions together

With millions of UK pension pots considered lost, employees are missing out pension savings that are rightfully theirs. Here’s how to help track down and rescue old pensions

As of 2022, UK savers had misplaced 2.8 million pension pots. That’s equivalent to £26.6bn in lost savings, according to research by the Pensions Policy Institute (PPI).

Its research also reveals the number of missing pots has increased by a staggering 73% between 2018 and 2022.

That’s a lot of unclaimed pension savings floating around, which could make a big difference to many people’s future retirement income. Indeed, according to Standard Life’s Retirement Voice 2023 report, 58% of people are worried about running out of money in the future.

It’s likely at least some of your employees’ retirement savings fall into the ‘missing pensions’ category. But the good news is that employers can help.

Why there are so many lost pension pots

Changing jobs is one of the main reasons why people lose track of an old pension, because when someone starts a new job, their employer will sign them up to a new workplace pension.

Secondly, people can move house and forget to tell their pension provider their new address.

How to help employees find their lost pensions

Many employees may be unsure of where or how to find their lost pensions, so it’s a good idea to tell them the options.

Sending out regular communications to remind employees to keep their pension details up to date could prevent pensions getting left behind in the first place.

Next, let employees know how to locate their lost pensions. The government’s Pension Tracing Service is a good place to start. All they need do is enter the name of their employer or pension provider to get started.

Standard Life members can also use its Pension Finder tool, available through Money Mindset. This works by scanning their employment history on LinkedIn and using these details to automatically search the Pension Tracing Service – making it quick and easy to find old pensions.

While it might be tempting to file the information away into a drawer for later, there is an option which might make it easier for them to stay in control of their savings: bringing their pensions together into one place.

The benefits of combining pensions

‘Combining pensions’, ‘Pension transfers’ and ‘Consolidation’ all refer to the same thing.

With a pension transfer, employees can bring all their pension savings together into one plan.

That means they’ll have everything in one place, making it easier for them to see how much they have – and giving them more clarity over their future.

Plus, they won’t need to manage multiple pensions anymore. This could save them a lot of time and admin, not to mention worry about forgetting old pension pots.

Of course, it’s important your employees think about if transferring is right for them. They’ll need to check they’re not giving up any valuable benefits or guarantees if they transfer, as they may want to keep these. Also, the value of investments can go down as well as up, and employees may get back less than was paid in.

Help employees decide what’s right for them

Combining pensions is an important decision to make, so it’s a good idea to signpost your employees to information that can help, such as the government’s MoneyHelper.

If you have a Standard Life workplace pension scheme, our pension transfer hub has a range of support materials that can help employees decide whether to combine.

And employees can get direct access to support through Money Mindset, where they can find bitesize content and tools to help them decide, as well as combine online.