Tracking down your lost pension: Where does it go?

In the UK, there is currently £31bn in assets floating around in unclaimed pension pots. But what happens when these assets aren’t reclaimed by their owners?

Pension providers will make every effort to reunite lost pots with their owners, but ultimately lost pensions can go into the Dormant Assets Scheme, where they may eventually be donated to charities. The scheme was set up by the government in 2011 and works in partnership with financial institutions, who can choose if they’d like to join.

If an institution, such as your pension provider, opts in, they first to contact the owner of the pension to reunite them with their funds. This can include getting in touch through mail, email, phone, or a credit reference agency. You can help this process be more likely to be successful by keeping this contact information up to date. But when people cannot be found, these companies have the choice to transfer that money to Reclaim Fund Ltd (RFL), who operates the Dormant Assets Scheme. In turn, RFL invests a portion of this money and allocates the rest across different charities.

The Dormant Assets Scheme began by dealing with financial products, such as bank accounts, but in 2022 expanded to include assets, such as pensions and investment and wealth management. It has released £982m to support social and environmental causes across the UK since launch in 2011.

Of the £1.98bn that has gone to RFL since the scheme began, just £157m has been reclaimed by account holders.

If you think one of your old pensions has become part of the Dormant Assets Scheme, there is no need to panic. You are still able to recover that money. The RFL invests some of the money they receive so that it will still have funds for those who come looking for their lost pensions later on. So, if you contact the provider of your old pension, they can contact the RFL and get that money back in your retirement fund.

Finding lost pensions

Thanks to pension auto-enrolment, since 2018, companies have automatically put some employees’ salaries into a pension. There are some exclusions to this, such as if you opted out of the scheme, were under 22, or earned less than £10,000 per year. Otherwise, you were likely enrolled.

If you look through your past employers and find that you do not have a correlating pension you can access for one or more of your workplaces, it may be lost. However, there’s a variety of resources to help you find it, including AJ Bell’s free pension finder service or using the government’s pension tracing service. If you use the government service, it will not tell you if you have a lost pension, but offers a database that allows you to see which pension provider your company would have used.

 You can then contact that pension provider, who can help reunite you with your assets.

To avoid losing pensions, combining your various pots into a single pension pot can be helpful. This allows you to keep track of your retirement savings through just a single account, instead of managing a handful. You should also keep your contact details up to date with all your pension providers, so they can contact you about the account.