Recent research suggests that the days of a ‘job for life’ are over, with the average Brit working in eleven different places over the course of their working life. In fact, one futurologist has even gone so far as to claim that the kids of today will have 40 different jobs, with their careers stretching right up until the age of 100.
Rohit Talwar: today's children should be prepared to work until they’re 100 and have 40 different jpbs http://t.co/gXLcL1MBqb | Mail
— Pre-School News (@earlyyearsontap) October 7, 2015
It’s off the back of this increasingly fluid labour market that we’re seeing people build up a patchwork of pensions, leading to an estimated £3 billion worth sitting unclaimed. This staggering amount indicates the scale of the lost pension problem - so what can you do to keep a handle on things when you move jobs?
Step one: track down that pension paperwork
First things first, you should find out who your old provider was.
Every employer ought to inform you in writing when you’re enrolled onto a scheme
Every employer ought to inform you in writing when you’re enrolled onto a scheme, so the best place to start is by finding the docs that’ll tell you a bit more about your pension. If you can’t find these don’t worry; your old employer should be able to tell you who your provider was, or we can help you discover this if you want to move your pensions to PensionBee. We’ll just need a little information about you and your old employers. Alternatively, you can see if the government’s Pension Tracing Service can help you.
Step two: press your old provider on fees
We’ve done a fair bit of research into the performance of pension providers, and we’ve collated the findings in our Robin Hood Index. One thing that our data illustrates is big discrepancies in annual management fees, and it’s important to note that these are still likely to apply even when a pension is dormant. In fact, you could be forking out for a whole host of charges.
Over time these fees can have a big impact, and take a big toll on your savings…
Travesty of the vanishing pension https://t.co/nCKazpEa1g via @thisismoney
— Philipcrawford (@Philipc37782932) September 21, 2016
With this in mind it’s important that you figure out what you’re paying. Get in touch with your old provider and press them on their charges, as you don’t want to end up in Paul’s position.
Step three: consider consolidating
Consolidating your pensions means bringing them together into a new plan, so you can control your retirement savings in one place. An obvious benefit of this is that it makes things simpler to manage, especially if you opt to use an online plan that you can access easily.
In addition to this, consolidating also means that you’ll only be paying one fee, rather than a cluster across a range of pensions. At PensionBee we only charge one single, annual fee.
Bear in mind that consolidating isn’t always the right decision though - especially if you have a defined benefit pension - so make sure you’re clued up before you consolidate. Ultimately it’s up to you to decide if this is the right decision for you, based on your individual circumstances.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.