Huge pension crisis ‘looming’ as millions lost – and how to avoid it

Budget 2021: Experts outline state pension changes

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Workers across Britain have long been urged to invest in their retirement, with most employers now offering a scheme to aid in the responsible saving for the future. However, a new study undertaken by a financial services company has shown this trend could see people who are due to retire in the next 30 years on a collision course with a “looming” crisis and millions of pounds lost in misplaced pensions.

The study, carried out by Opinium on behalf of financial services firm Hargreaves Lansdown, surveyed 1,000 UK workers.

The results showed that most young people had accumulated more than one pension over their working life, increasing the risk of losing track of several pensions and eventually losing vast sums of money.

The study showed that 45 percent of those polled had one pension, will 28 percent – more than a quarter – had two.

More than one in ten – 12 percent – said they had three pensions.

While 22 percent of aged 55-64 with a pension said they had three or more pensions, this rose to one-third of 18-24 and 35 to 44-year-olds.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, told Express.co.uk: “If younger workers have already accumulated three or more pensions, we have a looming problem of people losing track of what they have.

“This means they aren’t going to get as much pension as they should when they retire.”

The Department for Work and Pensions has said the shortfall could result in up to £50 million lost pensions by 2050, amounting to hundreds of thousands of pounds.

How to keep your pensions safe

According to the experts at Hargreaves Lansdown, the best thing you can do is keep a record of everything, and stay on top of things like changing your address with relevant parties if you move home.

Ms Morrissey said: “The reality is most people will work for several different employers and accumulate a number of pensions over their working lives.

“As you shift employers and then move house you can forget to keep your details updated and before you know it you have lost track of old pensions and this can be further complicated if an ex-employer was to be taken over and change its name, or go out of business.”

If you’re too late and have already lost track of old pensions, don’t worry, there is a Government-run tracing service you can access here, or call them on 0800 731 0193.

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You’ll need the name of the company you worked for and the name of the pension scheme or provider to get your details.

If you’ve accumulated a number of different pensions, you might also want to consider consolidating them.

However, Mr Morrissey said: “Think carefully before you consolidate.

“Some pensions might operate expensive exit fees if you transfer or you might miss out on valuable benefits like guaranteed annuity rates so take advice or guidance as necessary to make sure you come to the right decision for you.”

This news comes after Chancellor Rishi Sunak failed to deliver any major changes to pensions in the autumn Budget.

Mr Sunak’s only reference to pensions came when he said he will consult on further changes to the regulatory charge cap for pensions schemes, in a bid to “unlock institutional investment while protecting savers”.

The Government broke a manifesto pledge in September by introducing a new “double lock” system for the next year, to account for the way the Covid pandemic has inflated wage growth.

Because of this, we know that from next year the state pension will increase 3.1 per cent in line with the latest UK inflation rates.

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