- New PPI/ MaPS research reveals more than three million pension pots are lost across the UK, worth an average of around £6,000 each
- Standard Life points to pensions dashboards and small-pot consolidation as a potential turning point in tackling the lost pensions challenge
Emma Furlonger, Managing Director for Workplace Pensions at Standard Life, said: “It’s deeply concerning that so much money put aside for retirement can become disconnected from the people it belongs to. With around 2.5 million lost pots belonging to people under 55, this is clearly a challenge that extends well beyond those approaching retirement, and the answer can’t simply be to expect everyone to become an expert at tracking down pensions accumulated over decades of working life. Encouragingly, however, we could be approaching an important turning point, with the foundations for a more joined-up pensions system finally taking shape.
“Pensions dashboards have the potential to transform how people view and engage with their retirement savings, making it easier to reconnect with pensions and build a clearer picture of their financial future. Dashboards have been some time in the making but the industry is edging closer towards a launch and it will be a big milestone when they go live. At the same time, plans are afoot for a small-pot consolidator system designed to automatically bring together eligible small, dormant pots, these reforms could help prevent the problem from continuing to grow, rather than simply addressing it after the fact.
“Of course, neither reform will provide an overnight fix, and successful implementation will be critical. Good-quality data, effective communication and collaboration across government, trustees, employers and the pensions industry will all be essential to ensuring these changes deliver their intended benefits.
“Ultimately, we should be working towards a system that makes it easier for people to stay connected to their savings by design, rather than placing the burden on individuals to piece everything together. Together, these reforms have the potential to create a system that works harder for savers, reducing unnecessary complexity and giving people greater confidence and clarity about their financial future. The challenge now is to turn that promise into tangible improvements for savers.”
