According to recent findings by Scottish Widows, more than half (51%) of individuals now possess multiple workplace pension pots.
Among them, about 9% are unaware of the exact number of pension pots they hold, while 23% express intentions to consolidate their pension pots but are unsure of the process.
Michael Bryans, a 38-year-old music teacher from Dumfries, Scotland, found himself unaware of the total value in his retirement pots until he was presented with the opportunity to merge his pensions upon changing jobs.
At that time, Bryans discovered he had two pension pots – one valued at £20,768 and the other at £412 – prompting him to advise others to proactively consider their retirement strategies sooner rather than later.
Data from the Pensions Policy Institute reveals a staggering £31.1 billion estimated to be unclaimed, inactive, or lost in pensions, with the average unclaimed pot amounting to £9,469.
Reflecting on his experience, Bryans mentioned, “It was approximately two years ago when I switched jobs. That was the turning point when I learned I could consolidate some of my pensions, initiating the process.”
He emphasized the varied procedures and complexities involved in consolidating different pensions, urging individuals to persist and prioritize this task sooner rather than later.
Prior to consolidating pension pots, seeking independent financial advice is recommended. The primary advantage of consolidation is streamlining multiple pensions into one, reducing administrative burdens.
However, it is crucial to assess potential charges in the existing pension schemes compared to the consolidation option and be mindful of any exit fees that may apply.
Additionally, individuals should review the benefits in their current pensions to avoid missing out on perks like guaranteed annuity rates.
Bryans continues to track down pension pots from past part-time work while also establishing a private pension, contributing regularly to enhance his pension fund.
The Pension Tracing Service, a free tool, enables individuals to search a database containing over 200,000 workplace and personal pension schemes for contact details of providers to inquire about potential funds.
Alternatively, contacting employers for pension details is advised. Pension Wise, a government service, offers free guidance and advice on pensions.
Previously, a story was shared by The Mirror highlighting how a mother, Karin Ridgers, 52, discovered £48,000 in a forgotten pension pot, emphasizing the significance of staying informed about pension savings.
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