Jenny Ross: Why it pays to keep a grip on your pensions

How many pensions do you have? Chances are, it’s more than one – and quite possibly a lot more. It’s also possible that you don’t actually know.
Cash mountain: An estimated 20bn in pensions is "missing" in the UK. PHOTO: Peter Byrne/PA PhotosCash mountain: An estimated 20bn in pensions is "missing" in the UK. PHOTO: Peter Byrne/PA Photos
Cash mountain: An estimated 20bn in pensions is "missing" in the UK. PHOTO: Peter Byrne/PA Photos

On average, we’ll have 11 different jobs over our lifetime, which could mean building up 11 different pension pots in the process. It’s no wonder that some of us are struggling to keep tabs on them all.

An estimated £20bn in pensions is ‘missing’ in the UK, according to the Pensions Policy Institute, while around half of people over 50 and still in employment aren’t sure how much they have saved.

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A survey by the Association of British Insurers (ABI) showed that nearly a fifth (19 per cent) of people do not access information about their pensions.

As part of a recent Which? Money investigation, we challenged 12 savers to do just that. Our volunteers – who between them hold a total of 38 different pensions – set about combing pension statements and websites, and contacting their scheme providers.

But they soon ran into stumbling blocks. Some volunteers struggled to find the current value of their pension or their projected entitlement for a defined benefit scheme (where the amount you get is based on how long you’ve worked for your employer, and how much you’ve earned). One was told by their scheme that they would have to wait 40 working days for a new statement to provide this information.

Several discovered worrying errors. In one case, a volunteer discovered that no employer contributions had been paid into her pension for a period of eight months.

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Having a consistent overall format for statements to allow you to easily compare one scheme to another was a recurring plea from our volunteers, who struggled with the different terminology companies use to communicate the same information.

Missing information was another problem, with some volunteers unable to find any details on statements about their scheme’s charges.

The level of charges applied to defined contribution pensions (where money is paid in by you and your employer, and is invested) can have a huge impact on how much you end up with in retirement. But many savers don’t give them a second thought – one of our volunteers told us that until this exercise they hadn’t even been aware that charges apply.

It’s no secret that too few people are engaging with their pensions – and based on the experiences of our volunteers, it’s not hard to see why.

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Fortunately, a solution is on the horizon: ‘pensions dashboards’, a one-stop shop for all your retirement information. The idea is that you’ll be able to see up-to-date information about all of your pensions in one place online.

Which? has led the call for pensions dashboards and has a representative on the steering group striving to make the initiative happen. We want dashboards to not only show you the current value of your pots, but how much they might be worth when you retire and how much you’re paying for them in charges.

You should also be able to see how much you’re likely to get from the state pension.

The dashboard project could transform the way we plan for our future, but only if it gives full access to all of this information.

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The government originally promised to ensure that the industry designed, funded and launched a dashboard by 2019. As our research shows, it really can’t come soon enough, but a prototype version won’t be available until 2021 at the earliest.

In the meantime, here are some steps you can take to get to grips with your retirement savings:

Familiarise yourself with the basics: most pension schemes must send you a statement each year, but if you don’t think you’ve had one, or can’t find it, ask your provider. Also make sure any online logins still work.

Update your details: the onus is on you to tell pension companies of any changes in personal circumstances. If you haven’t updated your address since moving, your pension statements may end up with someone else.

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Nominate a beneficiary: after your death, your pension will normally become part of your estate. However, most pension schemes allow anyone to inherit your pension – this doesn’t have to be your spouse or civil partner. Complete a nominated beneficiary form to let your provider know who you would like this person to be.

Track down lost savings: the Pensions Tracing Service is a free service that searches a database of more than 200,000 workplace and personal pension schemes. All you’ll need is the name of the employer or pension plan, and you should then get confirmation of the provider’s contact details. To find out more about the pension, you’ll need to get in touch with the provider directly.