Millions of workers have lost track of their workplace pensions and have no idea how much they have as savings to finance their retirement.
Only one in four workers are confident that they know the value of their pension funds, according to research by finance giant The Prudential.
The survey also revealed:
- 16% of workers have lost or forgotten about pensions after changing jobs
- 76% have no idea of how much their combined pensions are worth to them in retirement
- 81% failed to transfer pension funds from their former employee scheme in to their new workplace fund
- 15% rely on their employers to switch the money for them
Pension saving is important
Keeping track of pension funds is a problem for younger workers, as they change jobs more frequently than older employees.
The findings showed workers aged between 18 and 34 have had an average three full-time jobs, compared with those aged 55 and over who have had five jobs in their careers.
Stan Russell, retirement expert at Prudential, said: “Saving into a pension today is an important step in the right direction for workers, to help ensure a comfortable retirement.
“It is essential for people to understand what type and level of savings they have built up in the past. They must make sure that their previous employers have their most up-to-date personal details and are sending them annual pension statements, so they can keep themselves properly informed.
Pension transfer advice
“Keeping track of pension savings at every age is important but it is even more crucial for younger workers, who are likely to switch jobs more often, to actively manage this process. It’s also important to consider the benefits of transferring previous pension savings into a new employer’s scheme, although seeking advice before making such a big decision is a must.”
The research also found workers who do know the value of their combined pension pots reckon they have built up a fund worth £110,207, on average, over their working lives. However, there is a significant gender gap here as men believe they have built up pension savings totalling £154,094, whereas women estimate they have saved only £50,512.
The Pensions Tracing Service can help find lost pensions.
Automatic pension enrolment starts on October 1, 2012, and will see people aged 22 to state pension age earning over £8,105 a year enrolled in to their employer’s pension scheme, with those working for larger firms joining up first. All employers will enrol their staff by April 2017.