Quarter of employees misplace pension pots, warns Age UK
12th April 2013 | News
An increasing number of workers that ‘job hop’ is creating a pensions black hole, according to a survey by the charity, Age UK. A quarter of workers surveyed admitted to misplacing pension pots over the course of their career.
This shift in working culture marks the end of the ‘jobs for life’ era, with employees now working for a higher number of companies and job hopping becoming the norm. One-in-four employees aged 25-to-34 has already worked for as many as six firms, matching the average number for those aged 65 or more.
As a result of this trend, nearly half of all missing pensions are simply forgotten, with a further 20 per cent lost because of missing paperwork.
The introduction of auto-enrolment, where employees are automatically included within a workplace pension scheme, came in last October for firms with 120,000 or more workers, with smaller businesses being enrolled gradually over the next six years.
Arguably the most worrying survey statistic was that less than a third of workers would bother to trace a lost pension. Any untraced savings are ultimately lost and therefore fail to supplement the retirement income of thousands of new pensioners.
Lucy Harmer, of Age UK, believes it is critical for employees to keep track of pensions administration, ensuring all financial products are safe and secure.
"This is especially crucial for pensions as it may be some years down the line until they need to be accessed,” she said.
"With the number of jobs we have over a lifetime increasing, it’s likely that people will accumulate several small pension pots. In many cases these bring a less fruitful income in later life than one large pension pot."