An estimated £20bn worth of lost and forgotten pension pots currently wait to be reunited with their owners, with many worth thousands of pounds according to recent research from Pensions Policy Institute (PPI).
The study, which surveyed firms representing about 50% of the private defined contribution pensions market, found 800,000 lost pensions worth an estimated £9.7bn. By scaling the data up to the whole market, PPI estimates there are around 1.6 million pots worth £19.4bn currently unclaimed; equivalent to almost £13,000 per pot. This figure is actually likely to be even higher with the inclusion of lost pensions held within the public sector, as well as trust-based schemes run by employers.
Losing track of pension pots occurs commonly when changing jobs or moving homes. Almost two-thirds of savers will have more than one pension, with changing work patterns meaning the number of people with multiple pensions will continue to increase. On average, a person will have around 11 different jobs over their lifetime and move house approximately eight times. Many workers in their 20s and 30s have already worked for more than half a dozen employers. The Government predict that there could be as many as 50 million dormant and lost pensions by 2050.
Despite considerable efforts by insurance providers to reunite people with lost pensions, firms are unable to keep pace with the mobile workforce.