How to help employees bring their old pensions together

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Millions of UK pension pots are considered lost. Could your employees be missing out on a portion of their pension savings? Here’s how to help them track down and bring old pensions together into one place.

As of 2022, UK savers have misplaced 2.8 million pension pots. That’s the equivalent of £26.6 billion in lost pension savings, according to research by the Pensions Policy Institute (PPI).

Their research also reveals the number of missing pots has increased by a staggering 73% between 2018 and 2022.

That’s a lot of unclaimed pension savings floating around, which could make a big difference to many people’s future retirement income. Indeed, according to our Retirement Voice 2023 report, 58% of people are worried about running out of money in the future.

It’s likely at least some of your employees’ retirement savings fall into the ‘missing pensions’ category. But here’s the good news. As an employer, you can help reunite them with their lost pensions and support them to save for their financial future.

But first, let’s look at the reasons behind the lost pension pot problem.

Why are there so many lost pension pots?

Changing jobs is one of the main reasons why people lose sight of their old pensions. That’s because whenever someone starts a new job, their employer will sign them up to a new workplace pension scheme. Given that most people will have several jobs throughout their lifetime, it’s easy to see how old pots can go astray.

Secondly, if people move house and forget to tell their pension provider their new address (which, let’s be honest, is easy to do) then their pension pot could go AWOL. 

How to help employees find their lost pensions

Many employees may be unsure of where or how to find their lost pensions, so it’s a good idea to raise awareness of the options.

First, it’s worth sending out regular communications to remind employees to keep their pension details up to date. This could prevent pensions getting left behind in the first place if employees move house or their circumstances change. 

Next, let employees know how they can locate lost their lost pensions. The Government’s Pension Tracing Service is a good place to start; all they need to do is enter the name of their employer or pension provider to get started.

If you’re with Standard Life for your workplace pension scheme, your employees can also use our Pension Finder tool, available through Money Mindset. This works by scanning their employment history on LinkedIn and using these details to automatically search the Pension Tracing Service – making it quick and easy to find old pensions.

So once your employees have found their pension pot, what’s next?

Whilst it might be tempting to file the information away into the drawer of forgotten paperwork, there is an option which might make it easier for them to stay in control of their savings: bringing their pensions together into one place.

What are the benefits of combining pensions?

‘Combining pensions’. ‘Pension transfers’. ‘Consolidation’. Your employees may have come across these terms and wonder what they all mean. In a nutshell, these all refer to the same thing. 

With a pension transfer, employees can bring all their pension savings together into one plan, rather than having them spread out over a few pots.

That means they’ll have everything in one place, making it easier for them to see how much they’ve got – and giving them more clarity over their future.

Plus, they won’t need to manage multiple pensions anymore. This could save them a lot of time and admin, not to mention save them from the worry of forgetting old pension pots.

Combining could also make it simpler for employees to check that their pension savings are in the right kind of investments, and change them if they’re not.

Of course, it’s important that your employees think about if transferring is right for them. They’ll need to check they’re not giving up any valuable benefits or guarantees if they transfer, as they may want to keep these. Also, the value of investments can go down as well as up, and employees may get back less than was paid in.

Help your employees decide what’s right for them

Combining pensions is an important decision to make, so it’s a good idea to signpost your employees to information that can help, such as MoneyHelper.

If you have a Standard Life workplace pension scheme, our pension transfer hub has a range of support materials that can help your employees decide if they should combine. 

Plus, employees can get direct access to support through Money Mindset, where they can find bitesize content and tools to help them decide, as well as combine online.