Hidden among the complexities of UK financial systems are over 3 million lost pension pots, totaling a staggering £30 billion. New research reveals a 17% rise in these unclaimed funds, prompting government initiatives to simplify tracking. Meanwhile, hundreds of thousands of former students are urged to check for potential refunds on overpaid loans, with up to £184 million available for reclamation. The conversation also highlights changes in universal credit repayments, promising to ease the burden for 1.2 million households.
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Lost Pension Overview
Over 3 million lost pension pots exist in the UK, totaling £30 billion.
The average lost pot is worth almost £9,500, but those aged 55-74 have lost the most, averaging over £13,600.
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Pension Awareness in Liverpool
Some individuals are unaware of their pension pots' locations or how to manage them.
Others have consolidated their pensions with advisors' help or plan to seek financial advice.
insights INSIGHT
Auto-Enrollment's Double-Edged Sword
Auto-enrollment has increased pension savings but also led to a rise in lost pots.
Changing jobs frequently and accumulating small, seemingly insignificant pots contributes to this issue.
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New research estimates that there are more than 3 million lost pension pots in the UK. These are pensions that have been paid into by an employer but the scheme can no longer find the person who owns it. The Pensions Policy Institute research also found number of lost pots has risen more than 17% since 2022. The Department for Work and Pensions told us millions of people will be saved from losing track of their pension pots thanks to its plans to consolidate deferred small pots in its forthcoming Pension Schemes Bill. The Pensions and Lifetime Savings Association says the industry has funded campaigns to raise awareness. Go to gov.uk and search 'pension tracing' to find contact details for your old pensions.
Hundreds of thousands of former university students are being urged to check if they have paid too much towards their student loan and if so to claim a refund. The campaign group Save the Student made the call in response to new figures from the Student Loans Company, published for the first time, which show former students are eligible for refunds worth £184m.
And in last week's Budget the Chancellor, Rachel Reeves, announced a reduction in the level of debt repayments that can be taken from a household’s Universal Credit payment each month. The new "Fair Repayment Rate" will reduce Universal Credit deductions from 25% to 15% per month. The government says that means that 1.2 million households will keep more of their award each month and those who benefit will gain an average of £420 a year.
Presenter: Paul Lewis
Reporters: Dan Whitworth
Researchers: Emma Smith and Jo Krasner
Editor: Jess Quayle
Money Box