Some 1.6 million lost pension pots worth nearly £20bn remain unclaimed, with people often losing track of their savings due to job changes or moving house, the Association of British Insurers (ABI) says, reffering to the figures as “jaw-dropping”.
Research by the Pensions Policy Institute (PPI) on behalf of the ABI revealed 800,000 lost pensions worth an estimated £9.7bn.
If scaled up to the whole market, it estimates there are collectively around 1.6 million pots worth £19.4bn unclaimed – the equivalent of nearly £13,000 per pot.
The PPI surveyed half of firms in the private defined contribution (DC) pension market, looking at 12 large insurers.
The PPI said the figure could be even higher as it did not look at trust-based schemes or public sector pensions.
The issue of lost pensions is likely to get worse as workers are now changing jobs more regularly, with the PPI commenting the average person will now change jobs 11 times in their lifetime.
Yvonne Braun, the ABI’s director of long-term savings and protection, said: “These findings highlight the jaw-dropping scale of the lost pensions problem.
“Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers.
“The industry has stepped up its efforts to re-connect savers with their lost nest eggs, developing a new framework launched earlier this year to help pension providers trace ‘gone-away’ customers more consistently.
It is important that the Government stands by its promises to take forward the pensions dashboard.
“This project has cross-party support, with the backing of consumer groups, and could mean a more secure retirement for millions of savers.”
In 2017, more than 375,000 attempts were made to contact customers, leading to £1 billion in assets being reunited with them.
As more people take up pensions with the roll-out of automatic enrolment, it is estimated there could be as many as 50 million dormant and lost pensions by 2050.
Savers can look for lost pension pots using the online government pension tracing service, via gov.uk/find-pension-contact-details.