News/Events

Too many people let their pensions savings perish [29th October 07]

Are you keeping track of your pension savings? A finding published by the Government website Directgov shows an alarming number of people aren’t- this could make a substantial difference to their retirement income.

“Over half of UK adults have no idea how much money they’ve built up in pension schemes – one in six people have no details of where their money is saved.”

Disturbingly it also found that this problem is likely to get worse in the future. The national survey found that one main reason for losing track of pensions is the number of times people change jobs, with one in five UK Adults changing jobs five times or more by age 34.

Our firm experiences this problem first hand.  A company group scheme member may leave the company and move to a new address. If they fail to inform us or their pension provider of their new address, inevitably they will no longer receive statements and these pensions are forgotten over time. 

Just this week I have received a retirement option pack from a pension provider who does not have the clients’ current address, nor do we. Do they know this exists or is it one of their forgotten plans?

To help people track down their lost pension plans, the Government have launched a free pension tracing service at Directgov. For those without internet access you can call the pensions tracing service on 0845 6002537.

I find it concerning that people lose track of their pension savings but what is probably even more unthinkable is the vast number of people who are aware of all their previous pension plans, still get all their statements, and perhaps even keep them neatly filed away – but never review them!

Pension savings are not all the same. You should review your pension plans regularly to ensure you have the correct contract and suitable funds which suit your particular requirements, your age and your attitude to risk as these can all change with time. You should be getting the most from your pension savings - not potentially leaving them to perish.

The combination of contract charges and fund performance is the key to making the best of your pension. There are significant differences between providers. It’s not a case of one contract being the most suitable for all. 

Too many people still have pensions bought 10 - 20 years ago. In the old days pensions typically had initial charges of 5%, management charges, policy and administration charges and a restricted range of funds. Those with these old pension plans may have charges which are eroding their fund especially if they have stopped paying premiums.

Fund performance and level of risk varies greatly, and has your plan been written under a nomination of beneficiaries – this helps the Company to pay out in the event of a death claim and be outside your Estate for IHT purposes. Don’t bury your head in the sand, openly review your pension plans and the individual funds that you are investing in regularly. 

Sort out your pension savings and make sure your pension plan is working hard for you by seeking Independent Financial Advice. Langtons are offering a free, no obligation pension review during November, Please click here for more details.

The above does not represent advice and due to the complex nature of pension legislation and individual circumstances, expert independent advice should be sought.

This article was written by Langtons - Published in the Western Morning News, This is Money, 29th October 2007