How to help your clients recover their lost pensions

What is a lost pension, and why does it happen?

A ‘lost pension’ might sound like an odd concept, but it’s simply a pension account that a client has lost track of over the years. Between job switches, moving homes, and other life changes, pensions can easily slip through the cracks. Unfortunately, these missing pots represent more than just forgotten paperwork; they’re real money that could make a huge difference in clients’ retirement.

And the numbers? They’re big. According to the ABI (Association of British Insurers), over 3.3 million pension pots in the UK are currently unclaimed, adding up to a staggering £31.1 billion in lost pensions. The average amount left unclaimed is around £9,470 per pot, and for clients nearing retirement (ages 55-75), that number can jump to £13,620. 

For financial advisers, helping clients find lost pensions isn’t just good service; it’s essential for securing their financial future. Clients often need your expertise to understand how to find lost pensions and how to avoid future losses.

What are the most common reasons for losing a pension?

Life is busy, and pensions often get left behind during major transitions. Here are some of the most common reasons clients lose track of their pension savings:

• Changing employment: With today’s job market, most clients will switch employers several times, especially Millennials and Gen Z. Each role might come with a new pension pot thanks to auto-enrolment, but with every job change, it’s easy to lose track of where those pots end up. The result? Lots of “lost pensions” that clients aren’t actively managing.
• Moving house without updating contact details: When clients relocate, they’re often caught up with the stress of moving and don’t remember to update their contact details with pension providers. Providers still send a lot of statements by post, so when addresses don’t match, pension information can get lost, making it tough for clients to find a lost pension later on.
• Name changes due to marriage or divorce: Whether it’s marriage, divorce, or just a name change, clients who don’t update their records can find it harder to track pensions later. Without an updated record, searching for pensions years down the line can feel like solving a puzzle with missing pieces.

How can financial advisers help clients recover their lost pensions?

As an adviser, you’re perfectly placed to help clients bring these lost pensions back into focus.

Here’s how you can guide them through the process:

• Review employment history: Encourage clients to make a list of every employer they’ve worked for, particularly those that offered a pension scheme. This employment “roadmap” is a solid foundation for tracking down potentially forgotten workplace pensions, and it sets them up for success in finding lost pots.
• Pension tracing services: Direct clients to the government’s free Pension Tracing Service, which can help them find contact details for former pension providers. This service can’t reveal specific pension values, but it’s a great tool to point them in the right direction. For more detailed help, private tracing services are also available, though these might come with a fee.
• Contact past employers and pension providers: Suggest that clients reach out to any known former employers or pension providers for information. Even if they don’t have all the details, most providers can look up accounts based on partial information. Reconnecting with these providers can be a valuable step to find a lost pension or two.

What steps can be taken to trace a lost pension?

Once a client is ready to track down their lost pensions, here’s a simple, step-by-step guide to keep them on course:

1. Make a list of past employers and pensions

Encourage clients to write down every company they’ve worked for, especially those they know offered pension plans. Even a rough list can provide direction and help narrow down which pensions might need tracking.

2. Use pension tracing tools

Guide them to start with the government’s free Pension Tracing Service for provider contact details. For more detailed help on how to find lost pensions, private services like Gretel offer more in-depth tracing options. Aviva has also introduced its ‘Find and Combine’ service, which is designed to help savers identify and consolidate lost pensions. 

3. Contact pension providers and employers directly

If clients know the providers of their old pensions, reaching out directly with any identification details or plan numbers can be effective. Even reconnecting with former colleagues can sometimes help uncover provider information, which is particularly useful for clients trying to find lost pensions.

4. Check bank statements for contributions

Clients who have trouble remembering their previous pensions may find helpful clues in old bank statements, where pension contributions might still be recorded. This is a simple but effective strategy for tracing a lost pension when other records aren’t available.

5. Keep everything organised

As clients move through the process, remind them to document every step. Whether it’s a call with a provider or searching old files, staying organised will help keep them focused and prevent future losses.

How can clients keep their pensions safe and easy to track?

Once clients have recovered any lost pensions, keeping those funds safe is the next priority.

Here’s how they can protect their pensions going forward:

• Regularly review pension statements and update contact details: Encourage clients to check their pension statements routinely. This habit not only keeps them updated on account balances and any fees but also ensures their contact information stays current. A regular review makes it less likely they’ll have to go through the tracing process all over again.
• Consider consolidating pension pots: Consolidation might simplify management for clients with several pension pots. By combining multiple pots into a single pension, clients can more easily keep track of funds. However, consolidation may not suit everyone, so it’s worth helping them assess charges, performance, and potential benefits before making this decision.
• Keep an organised record of pension documents: A designated file for pension-related documents, from plan details to provider contacts, can be incredibly helpful. By maintaining a well-organised record, clients can avoid the paperwork scramble later, making it easier to keep track of their pensions over time.

Want to work with Unbiased?

Helping clients recover lost pensions is not just about retrieval; it’s about empowering them with tools to stay informed and prepared for the future.

Your role as an adviser means clients can feel confident about their pensions, even if they’ve lost track over the years. With a solid process for tracing, organising, and managing their pensions, you help clients secure not just their pots but also their peace of mind.

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