Workers lose out on pension pots worth £26billion

MILLIONS of cash-strapped workers have lost pension pots worth a staggering £26.6billion.

- Sarah O'Grady

That is an average of £9,500 unclaimed in almost three million "orphaned" accounts.

Many people will be due a significant amount more, which could make the difference between security in retirement or penury.

The situation is set to worsen in coming years as many of the 10 million employees recently auto-enrolled into their workplace pensions lose track of their savings.

And disruption to lifestyles caused by the pandemic exacerbated the problem.

Since 2018, the value of lost pension pots in the UK has risen by 37 per cent to reach £26.6billion, says the Pensions Policy Institute shows.

And 2.8 million funds are now considered lost, an increase of 75 per cent over the last four years.

Problems usually arise because people forget about pots built up in previous jobs, or they change their name or move house without telling their pension provider.

The industry spends millions of pounds every year on measures to help identify, track down, verify and reconnect people with their lost pension savings.

But only one in 25 people instinctively thinks to tell their pension provider they have moved home, compared to the 89 per cent who inform their GP or dentist.