£113 billion in pension savings could be at risk during the ‘Great Resignation’

Laura Dunn-Sims

by , PR Manager

16 Sept 2021 /  

16
Sept 2021

Man packing up his belongings after leaving his job

New research from leading online pension provider PensionBee finds that 63% of UK workers are currently thinking about or in the process of changing their job, in what has been dubbed the ‘Great Resignation’.

More than half (51%) of respondents who are getting ready to make these employment changes already have several pensions from previous jobs, and are worried that they will lose track of them during the move. PensionBee analysis projects that as much as £113 billion in pension savings could be lost track of, by 10.4 million consumers, as a consequence of the rise in job switching.

According to PensionBee research, most job switchers (67%) would like to bring all of their old pensions together into one pot but are worried about the complexity involved. Only 14% of respondents have a plan for their current workplace pension that they feel confident about, whilst a third haven’t given it any thought. Additionally, most (66%) don’t know how much they’ve saved in total across their pension pots.

Romi Savova, Chief Executive Officer of PensionBee, comments: “Whilst it’s very encouraging to see workers taking positive action to pursue careers that would make them happier, this could result in a loss of more than £100 billion in pension savings if they don’t carefully consider a plan for their existing workplace savings.

Our research highlights the importance of consumers having access to an easy pension consolidation process in order to avoid losing track of their hard-earned retirement savings when switching jobs. Pension providers must take away the jargon, paperwork, and complexity, and instead simplify pensions using digital technology. With frequent job switching now a common practice, savers should have the ability to combine their old pensions in one pot and be able to monitor these savings regularly.”

Appendix

Table 1: UK Consumer Survey - Job switching

Which of the following applies to you? Proportion of respondents
I don’t have any plans to leave my job for the foreseeable future 33.9%
I’m planning to change my job within the next 12 months 27.1%
I’d like to change my job but don’t have any plans to do so yet 23.6%
I’m planning to change my job when the economy recovers 9.5%
I’m not currently employed due to another reason, e.g. I’ve retired, studying, caring 3.4%
I’m not currently employed because I’m between jobs 2.5%

Source: PensionBee, August 2021. Respondents: 797.

Table 2: UK Consumer Survey - Current workplace pension

Have you thought about what you’ll do with your current workplace pension when you change jobs? Proportion of respondents
I’ve given it some thought 35.8%
No, I haven’t given it any thought 33%
I’ve made a plan for my pension which I feel confident about 14%
I’ve tried to research options but it’s too complex so I gave up 13%
I don’t have a pension because I opted out 4%
Other 0.2%

Source: PensionBee, August 2021. Respondents: 500.

Table 3.1: UK Consumer Survey - Pension consolidation and visibility

I have several pension pots from previous jobs and I’m worried I’ll lose track of them Proportion of respondents
Strongly agree 15.9%
Agree 35.1%
Neither agree nor disagree 14.4%
Disagree 25.5%
Strongly disagree 9.2%

Source: PensionBee, August 2021. Respondents: 500.

Table 3.2: UK Consumer Survey - Pension consolidation and visibility

I’d like to bring all my pensions together but it seems very complicated Proportion of respondents
Strongly agree 21.7%
Agree 45.1%
Neither agree nor disagree 22.3%
Disagree 7.9%
Strongly disagree 2.9%

Source: PensionBee, August 2021. Respondents: 500.

Table 3.3: UK Consumer Survey - Pension consolidation and visibility

I don’t know how much I’ve saved in total across my pension pots Proportion of respondents
Strongly agree 26.9%
Agree 39.2%
Neither agree nor disagree 14.2%
Disagree 14.6%
Strongly disagree 5%

Source: PensionBee, August 2021. Respondents: 500.

Table 4: Pension savings at risk

Average weekly earnings UK (£) 576 (1)
Average annual earnings UK (£) 29,952
Average tenure (years) 4.5 (2)
Minimum pension contribution 8% (3)
Workers thinking about or in the process of job switching 63%
Estimate for the number of workers in the UK aged 16+ (Sept to Nov 2020) 32,500,000 (4)
Proportion of respondents who feel worried about losing track of several pension pots 51%
Total pension savings at risk of being lost during the Great Resignation (£) £112,595,857,920

Source: PensionBee, August 2021. Combination of PensionBee, ONS, and Government data

Footnotes

  1. ONS
  2. Talint International
  3. Gov.UK
  4. ONS

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