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The total value of ‘lost’ pension pots is now estimated to be £31.1bn – a rise of £4.5bn from £26.6bn in 2022.
The new data, published by the Pensions Policy Institute (PPI), also reveals that almost 3.3 million pension pots are now considered lost, containing an average sum of £9,470. This rises to £13,620 among people aged 55 to 75.
PPI said a combination of people switching jobs and automatic enrolment into workplace pensions is behind the increasing number of lost pensions.
Earlier this week, pensions minister Emma Reynolds repeated the government’s commitment to developing Pension Dashboards, which aims to make it easier for savers to locate old pots and combine pensions.
The Department for Work and Pensions (DWP) is currently working on plans to automatically consolidate small pension pots of less than £1,000.
Rachel Vahey, head of public policy at AJ Bell, said: “Automatic enrolment is often held to be one of the most successful public policies of our time.
“It is credited with enrolling over 11 million people into a workplace pension since 2012, creating many new pension savers.
“But with people switching jobs regularly – around 11 times over the course of a lifetime according to some estimates – it’s easy to see how some people end up losing track of the pension pots they have built up.
She said that lost pension wealth hitting £31.1bn, means “millions of people could be in danger of facing an incomplete picture when it comes to their long-term financial planning”.
“Knowing how much they have saved in a pension, and where that money is invested, is one of the most important steps savers can take to maintain a level of control over their future retirement,” she added.
“Only by having this overall picture can pension savers work out how close they are to achieving their financial goals, and what action they may need to take to get their desired income and standard of living in later life.”
If you want a better view of what your future could be, we'll have a chat over a cup of coffee in our Durham office and work out if we can add any value to your financial picture.
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