Millions of Britons are overlooking significant sums of forgotten pension funds, potentially amounting to £65 billion, with an average of £19,600 per forgotten pot.

Financial commentator Martin Lewis has highlighted this substantial financial oversight, describing the sum as ‘jaw-dropping’ and encouraging individuals to actively pursue these lost assets, labeling the endeavor as ‘seriously profitable.’

The impact of such a pursuit has been significant for some. One couple successfully located a lost workplace pension valued at over £60,000, while another individual was reunited with an impressive £137,000. Early indications suggest that the administrative effort required to initiate the search is minimal, with a recent experiment demonstrating that the process can be kickstarted in as little as seven minutes.

Why Pensions Become Lost

According to Lewis, pensions often become lost when individuals fail to update their contact information with providers. Additionally, company mergers, name changes, or insolvencies can lead to pension funds becoming untraceable. Over time, these forgotten funds can become dormant and, in some cases, may ultimately be transferred to charity. However, even in these situations, the funds are typically still reclaimable.

How to Track Down a Lost Pension

Analysis from the Pensions Policy Institute at the close of 2024 estimated that approximately 3.3 million pensions in the UK are currently unaccounted for. To determine if you have a lost pension, the initial step involves compiling a list of all former employers. While original paperwork is beneficial, contacting the HR departments of past employers can offer guidance.

For those who need further assistance, the government-operated Pension Tracing Service is a free resource. This service holds details for over 200,000 pension schemes. By providing the name of a former employer or pension provider, the service can help locate up-to-date contact information for the relevant scheme, even if the company has undergone changes.

The Pension Tracing Service can be accessed through the official Government website or by calling 0800 731 0175. For individuals who struggle to recall past employers, Gretel, a fintech firm established in 2022, offers an alternative. Gretel conducts a credit report ‘soft search’ to identify previous addresses, which then aids in locating associated missing pensions. Initial results are typically available within minutes, and the platform continues to search for new matches every 14 days.

‘Once you have details, contact the pension provider (you’ll usually need to provide ID),’ Martin advises.

Should You Combine Your Pensions?

After locating your pension pots, a key consideration is whether to consolidate them. Experts suggest there are compelling reasons to combine multiple pensions.

Potential for Lower Charges

Pension providers have varying fee structures. Older pension plans may carry higher annual charges. Consolidating into a plan with better value and features can reduce costs and enhance the overall value of your pension pot.

Improved Tracking of Total Savings

Combining pensions can simplify the process of estimating your total retirement income. Better visibility of your savings allows for more informed decisions regarding contribution levels and retirement lifestyle planning.

Avoiding ‘One-Size-Fits-All’ Investments

Lost pensions may have been invested in standard ‘default’ funds designed for a broad audience. Some ‘lifestyle’ funds automatically adjust investment strategies based on age, which may not align with individual retirement goals.

With a significant amount of money potentially waiting to be claimed, dedicating a short amount of time to investigate is highly recommended.