An extraordinary number of Britons began saving for their pension years ago and completely forgot about this cash. It may seem unbelievable to think that people are able to forget about money but there is an estimated £1.4 billion in accounts worth less than £5,000 that is not being used.
These are pension pots left behind when people move between jobs. This is especially prevalent at the start of careers. The Pensions Advisory Service has warned people that the process of finding these missing pension pots can be extremely slow. Some individuals don’t remember starting up a fund while others are of the opinion that the money has been swallowed up by companies. Pension transfers with this money can be difficult which is why you need great pension advice.
It is estimated that there will be almost 5 million small pension pots added to the system in the next 40 years. The main reason for this is the auto-enrolment scheme implemented by the government which compels employees to save cash. Another reason is the fact that workers switch jobs with regularity in a bid to find the most suitable vocation and company. As the rules stand, it is difficult for people to claim their hidden pension cash. The Department for Work and Pensions state that around 70,000 people get in touch with them annually for help in finding a lost pension.
Pension Tracing Service
At present, pension advice is more valuable than ever for those seeking to be reunited with long-lost funds because of the low savings rates and falling annuity rates. A major problem faced by many searchers is that the company they used to work for no longer exists or else it has been the subject of a takeover. Then there is the small matter of lost records. There is a Pension Tracing Service that can help because it has access to over 200,000 personal and company pension schemes. This pension advice could help you contact the relevant pension provider to find out if you are entitled to any pension payment. If you go down this route, we suggest that you have as much information on hand as possible regarding the pension scheme.
If you successfully use pension advice to find an old fund, you’ll need to carefully look at the details of the scheme to see if it’s worth making a transfer. There could be valuable guarantees that will be lost if you transfer, not to mention fees. Some pension schemes carry benefits such as guaranteed growth and annuity rates which could be worth a fortune. If you have an old pension scheme, it may have an in-built annuity rate which is far beyond anything available today.
It’s important to note that a pension transfer may not be worth it if the pot is less than £5,000. However, it is possible to cash two pension pots worth less than £2,000 each once you reach 60 for a lump sum. 25% of this cash will be tax free. If you have missing cash or are in need of pension advice, contact us today and we will place you in touch with a reputable pension specialist.
This article has been written in good faith. It is believed to be accurate at the time of writing and is for information only.
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