Lost UK pensions: Here are 3 useful benefits of locating a dormant pot

A happy senior couple sit in front of a laptop

“Opportunity does not knock. It presents itself when you beat down the door”. It is one of the many motivational quotes from Friday Night Lights fictional American football coach Eric Taylor that ring true in life as much as out on the sports field.

You can’t expect good fortune to find you. In the words of another fictional inspirational figure, you must “seize the day”. It is an important step along the road to making your long-term dreams a reality.

One way you might actively improve your situation is through spending the necessary time tracing any lost or dormant pension pots you may have, and potentially providing your retirement plans with a well-needed boost.

Read on to discover the process behind locating lost pensions and three useful benefits of finding a potentially untapped solution to any retirement income shortfall.

Lost workplace pensions can be valuable and may help reduce any retirement income shortfall

According to Unbiased, there are currently approximately 1.6 million lost UK workplace pensions. The Association of British Insurers (ABI) estimates the worth of these pots at £19.4 billion with the average pot totalling £13,000.

It is a startling figure, considering 1 in 6 Brits over the age of 55 admit to having no pension savings set aside at all, outside of the State Pension. In fact, Unbiased reports that 24% of over 55s are simply unsure of the current value of their pension savings.

Losing track of a pension scheme can be an easy mistake to make over the course of a career — as moving jobs, joining additional workplace schemes, changing addresses, and relocating to Australia — can lead to an older pot being misplaced.

Lost pots could be potentially valuable and might help towards reaching the funds necessary for a comfortable level of retirement.

Three useful benefits of locating a lost UK pension pot

1. The value of the pot could help reduce any retirement income shortfall

According to research from Royal London, 46% of non-advised individuals and 37% of those who receive financial advice have worries about being able to cope financially when they retire.

Locating a lost pension pot could go some way towards alleviating those concerns.

According to MoneyAge, approximately 28% of Brits have saved funds into three or more pension pots throughout their careers. It is natural to find it difficult to keep up, particularly living on the far side of the world, with multiple plans over the passing years and potentially misplace an older scheme or two.

Canada Life found that 1 in 6 Brits have sought to track lost pensions. Individuals that were successful discovered on average at least £6,351 with 8% of fruitful finds recovering dormant pots exceeding £20,000 in value.

Two of our clients recently located UK pensions they had forgotten about with the values being over £35,000 and £16,000, both were funded by contracting out of then additional State Pension (also known as “State Second Pension” or “SERPs”).

It is possible that finding a lost pension scheme or two, may result in a significant boost to your retirement savings.

2. Compound returns could see the value of any dormant pots grow over time

Time can be a valuable tool when working to build your retirement savings. The growth generated by “compound returns” on your pension savings over years or decades can see the value of your pot greatly increase.

For example, if you had £10,000 or AUD $10,000 invested in a lost pension pot from 30 years ago — compounding annually at 5% — it would be worth over £40,000 (or AUD $40,000) today, as shown by the graph below:

Source: Investopedia

Your pension pots may have been lost, but they won’t have been sitting idle.

It should be noted that even the smallest of contributions, given an appropriate amount of time, can grow into significant sums.

3. Once found, consolidating your various pots could produce savings and reduce your fees and stress

Consolidating your pots can be a useful step, especially if you’re based overseas and currently managing multiple pension pots.

If you are successful in locating a lost pot, it may be a beneficial step to consider consolidating the funds into a single scheme. This could help to reduce some of the hefty charges associated with older schemes and may result in substantial savings.

Just as time passed can benefit your pot in terms of compound interest, time saved adds value as well. Through managing a single, consolidated pot, overseeing your retirement plans is likely to be less time-consuming and could alleviate any unnecessary stress you might be feeling.

However, there are potential downsides. So, it is important that before making any major choices, you should get in touch with me, as the advice of a financial planner — especially one you trust — can have real proven added value in helping you to reach your long-term goals.

Tracing a lost pension is a simple process with potentially beneficial outcomes

If you’re unable to establish which previous employers or schemes might hold lost pots in your name, the UK government’s Pension Tracing Service should be able to help.

It is free to use and can assist with tracing any pensions lost over your career, even if you don’t recall all the key details.

To streamline the process, it is vital that you try and source as much information as possible before hand, which might include:

    • The name of any previous pension service or employer
    • Essential employer information such as trading names, business addresses, and their related industry
    • Dates you believe you belonged to their pension scheme
    • Your personal details including UK National Insurance number.

While you might not find anything, if you do there could be significant benefits.

Get in touch

If you have any lingering concerns about your future retirement plans, or the possibility of a savings shortfall, you should contact me by email at jason@jasonoconnell.com.au or call 0498 740 840.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

Workplace pensions are regulated by The Pension Regulator.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. 

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

This information in this email is general advice and does not take account of investors’ objectives, financial situation or needs. Before acting on this general advice, investors should therefore consider the appropriateness of the advice having regard to their objectives, financial situation or needs.


 Financial solutions for expatriates in Australia | Jason O’Connell is an Authorised Representative (“AR”)  1269423 Shartru Wealth Management. ABN: 46 158 536 871 operating in Australia under AFSL: 422409.


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