Everyone seems to be tracking me from Strada to my twitter followers. But does my pension money follow me when I move house – no it doesn’t!
Unless you are with a new provider where you are in digital-touch, the most the people who are looking after your retirement pot know of you, is where they last heard you lived.
Let’s face it, it’s hardly top of the provider’s investment list; what could be more agreeable than to hang on to your savings indefinitely, especially if you’ve got a meaty annual management charge in place.
To be fair to many providers, improving their digital interactions is moving up the list as the prospect of a pension dashboard begins to take shape. But we won’t be using the dashboard’s digital tracing service for at least two years and it may not be fully up and running till much later this decade. This is not an issue you can leave on someone else’s door-mat.
We all have seen statements on other people’s finances arrive in our letter boxes and gulped when we thought that people living in our previous homes are now being told about our savings.
In 2018, the Pension Policy Institute reckoned £20bn of our pension saving had gone missing.
Pension Bee now estimate that £64 billion in pension savings could be lost track of due to savers not updating their details when moving house
Their research finds that almost a third of savers (32%) believe that it doesn’t matter whether they inform their pension provider(s) of a change of address, as they will still be able to find and contact them. This belief could be extremely detrimental to pension savers as an estimated £64 billion in pension savings could be lost track of due to out of date contact details.
Moving house and changing jobs are the most common reasons that savers lose track of their pension(s) – either forgetting to update their contact details with their provider or losing their providers’ details themselves.
The coronavirus pandemic has resulted in a flurry of house move activity, with droves of city dwellers looking to move to rural regions in the pursuit of more space, free from the ties of office working. In June 2021, the number of homes changing hands in the UK rose to the highest level on record, with 213,120 sales registered with HMRC. These high levels of movement look set to continue with an estimated 160,000 homes changing hands in the last month alone.
Of the respondents surveyed by PensionBee, 40% shared that they had either moved since the pandemic, or were planning to move in the next year. More than half of respondents (67%) reported that their home move had been influenced by the pandemic, citing reasons such as having more time to act on a move, wanting to be closer to loved ones or changes in their financial situation.
Almost 70% of respondents reported that they still receive annual paper statements by post. Yet despite this continued dependence on paper correspondence, only 37% of respondents revealed they had updated their address with their pension provider(s) in advance of moving, with 28% planning to update their contact details once their move was complete.
On the other hand, 18% of respondents admitted they hadn’t got round to updating their provider(s) yet but it was on their ‘to-do list’, while 15% revealed that they hadn’t thought about updating their provider(s) at all.
Overall, most of the respondents (67%) agreed that by not updating their provider(s) of a change of address, they run the risk of losing track of their pension savings. This was felt by the majority of women (66%), compared to only 34% of men. Additional risks include delayed withdrawals and investments, records being lost due to mergers of pension providers, and fraud with consumer information being sent to an old address.
Top consumer tips from Romi Savova, CEO of PensionBee
It’s extremely shocking and concerning to see just how much UK savers risk losing track of in pension savings. As house moves are increasingly popular at the moment, it’s never been more important for savers to ensure that their providers have up-to-date contact details.
Pensions are a long-term investment so changes in personal details are expected over the years. All providers need to offer digital solutions so savers can easily update their personal information and manage their savings in a few clicks, instead of relying on the outdated practices of the past.
Losing track of hard-earned savings can have a significant impact in later life, and could see millions of people working for far longer than they would otherwise need to, before they can afford to comfortably retire.