Employees with multiple pots risk losing track of their savings
With the average employee's career now involving an average of eleven jobs, many workers in the UK will have multiple pension pots to keep track of.
But worrying research from Aegon has revealed that over a third (39%) don't know the total value of their pensions – and a fifth (21%) have even lost track of one or all of their pensions. The result is a potential 6.6 million people who may have misplaced some of their retirement savings.
The findings come in the light of research from WEALTH at work, a leading provider of financial education in the workplace, supported by guidance and advice, which shows that only one in ten (10%) of UK employers believe their employees are saving enough for their retirement – but that over half of employers (55%) either provide no support, or information only for employees at-retirement.
The pensions dashboard, due in 2019, may provide some of the necessary support: Aegon's research shows that 67% of people would be interested in consolidation of pensions funds for ease.
Kate Smith, head of pensions at Aegon, commented: “A majority of people now have more than one pension but it’s a concern to find that 21% of these people have lost track of some of their savings. It’s very hard to plan your retirement without a full view of your savings and it’s important everyone has a clear idea of how much their pension is worth and what their state pension entitlement is likely to be.”
“Looking to the future, the launch of a pension dashboard in 2019 should simplify the process offinding lost pensions, and has the additional bonus of seeing all your pensions, including the State pension, in one place. It should also make it simpler to consolidate in future, but people don’t have to wait until then to get their pensions in order. The Department of Work and Pensions (DWP) pension tracing service can already help people find lost or forgotten pensions they built up many years ago.”
Jonathan Watts-Lay, Director, WEALTH at work, comments: “Anything which helps people to understand what pension savings they have is a good thing. However, as retirement income is no longer just about pensions but all types of savings, the dashboard clearly has limitations as it only considers pensions and may in fact not include all types e.g. defined benefit schemes. What individuals really need is education, guidance and advice on how best to take income in retirement from all their savings, and how to do this as tax efficiently as possible.”
Reward and WEALTH at work are blogging about financial education, savings and retirement options. FOLLOW THE SERIES HERE