Take control of your long-term retirement planning by tracing old pensions

Travel Weekly is extending its personal and business information content by teaming up with financial advisor David Croft for a regular column offering answers to readers’ questions about personal finance. In this column, David, who previously worked in the travel industry, suggests a simple way to save some money.

We had a terrific response to our column last month on taking control of the controllables, and I was so pleased to hear about the savings made just by re-evaluating some of those ‘sleeper costs’ from your monthlies.

Continuing in that fashion, this time I want to talk about something I discuss with clients on a daily basis: locating your old pensions.

Imagine if £1,000 fell out of your pocket – you’d probably notice? You’d retrace your steps and do whatever you could to find it. Yet with an old pension that may be worth even more, things are often different. According to the Department for Work and Pensions, there are roughly 23 million deferred pension pots worth less than £10,000, representing around £39 billion in assets. Of those, around 13 million are worth less than £1,000. Could any of these be yours?

If you paid into a workplace pension, your employer may have paid in too. That pot is likely still invested and may have grown, but it may also carry charges, investment choices or valuable features you have forgotten, or never properly understood. That is why it is worth not only tracking down old pensions but also doing a pension tidy-up. This is your money, after all, so bring it into your eyeline.

Start tracking your pensions

So where to begin? Write down all the jobs you have had – this will take longer for some than others. Think about part-time jobs, early career roles, old branches, overseas seasons and roles you may not immediately associate with a pension. It is worth checking anything since auto-enrolment began rolling out in October 2012.

Then look for proof. Old payslips, P60s, pension statements, joining letters, HR emails, employment contracts and bank statements can all help. You don’t need much: just the employer name, pension provider, scheme name, or any policy or membership reference.

If the company still exists, contact HR or payroll. They may not confirm everything straight away, but they should be able to tell you which provider was used at the time. Former colleagues can be useful too – someone may remember, especially if they have already gone through the same process.

"The worst option is to do nothing. The sense of control you’ll gain from knowing exactly what you have in place for retirement will be enormous"

You can also use the government’s Pension Tracing Service. It’s free and can help you find contact details for a workplace or personal pension scheme. Note that it does not tell you whether you have a pension or what it is worth – it simply gives you the contact details so you can speak to the provider directly.

When contacting a provider, be ready with your National Insurance number, previous addresses, previous names, dates of employment and any old reference numbers. The more information you have, the easier it will be to match you to the right record.

Consider consolidating your pensions

Once found, the next question is what to do with it. In some cases, it makes sense to leave a pension where it is; in others, consolidating makes things easier to manage. There is no one correct answer. Before moving a pension, understand the charges, performance, investment choices, retirement options, guarantees, penalties and whether any benefits could be lost. This is where professional advice may help.

The worst option is to do nothing. The sense of control you’ll gain from knowing exactly what you have in place for retirement will be enormous. 

So start with a list of your old employers and see if anything is missing. You’ll be halfway there.