Anyone who has lost track of a pension they previously paid into has a
greater chance of being reunited with it after the government announced
today that it will triple the size of its Pension Tracing Service
(PTS).
The free service, which helps people find lost pension cash, is gearing up for more calls ahead of the radical new changes to the pensions system that will come in on 6 April.
From that date anyone over the age of 55 will have much greater freedom to do what they want with their pension money, rather than having to buy an annuity. The government is launching a guidance service called Pension Wise and expects that many of those who contact it will be referred to the Pension Tracing Service.
“With people having an average of 11 different jobs during the course of their working lives, it can be very easy to lose track of pensions they may have built up with previous employers,” said Steve Webb, minister for pensions.
“If you contributed to a pension in a previous job and don’t have any details any more, it would be worth contacting our free PTS to see how you can be reunited with your lost pension pot.”
Last year the service was contacted 145,000 times, double the amount of calls taken four years ago. In around 87% of cases last year and the previous year PTS staff were able to put people in touch with a former pension provider. It is then down to the individual to contact the scheme to find out if they have a pension. The most common reason for losing track of a pension is when an employee doesn’t tell a former employer of a change of address.
Estimates suggest that there could be as many as 50m dormant and lost pension pots by 2050.
Next month the government will announce more details of a proposed “pot follows member” system. Webb said it would be in place by autumn 2016, and would mean that pension pots from past employers with a value of £10,000 or less would be transferred to an employee’s existing scheme.
“Every time someone moves to a new job there is a significant risk that they leave behind a small pension pot which may get stuck in the system,” Webb said. “Without change, too many people could end up with an ever-increasing number of small, scattered pension pots and an inadequate retirement income.”
The free service, which helps people find lost pension cash, is gearing up for more calls ahead of the radical new changes to the pensions system that will come in on 6 April.
From that date anyone over the age of 55 will have much greater freedom to do what they want with their pension money, rather than having to buy an annuity. The government is launching a guidance service called Pension Wise and expects that many of those who contact it will be referred to the Pension Tracing Service.
“With people having an average of 11 different jobs during the course of their working lives, it can be very easy to lose track of pensions they may have built up with previous employers,” said Steve Webb, minister for pensions.
“If you contributed to a pension in a previous job and don’t have any details any more, it would be worth contacting our free PTS to see how you can be reunited with your lost pension pot.”
Last year the service was contacted 145,000 times, double the amount of calls taken four years ago. In around 87% of cases last year and the previous year PTS staff were able to put people in touch with a former pension provider. It is then down to the individual to contact the scheme to find out if they have a pension. The most common reason for losing track of a pension is when an employee doesn’t tell a former employer of a change of address.
Estimates suggest that there could be as many as 50m dormant and lost pension pots by 2050.
Next month the government will announce more details of a proposed “pot follows member” system. Webb said it would be in place by autumn 2016, and would mean that pension pots from past employers with a value of £10,000 or less would be transferred to an employee’s existing scheme.
“Every time someone moves to a new job there is a significant risk that they leave behind a small pension pot which may get stuck in the system,” Webb said. “Without change, too many people could end up with an ever-increasing number of small, scattered pension pots and an inadequate retirement income.”
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