As an IFA (Independent Financial Adviser) and industry professionsal, I am constantly reminded that the majority of consumers are unaware of the collective value of their pension funds. If this is true, it could potentially result in millions of pounds of unclaimed investments.
Friends Life Pension Survey (information available on 23 July 2012 through Friends Life Media Services)
Friends Life is the latest of many product providers who have produced a survey detailing that 10% of those who responded had no record of their corporate pensions held with previous employers, and 32% were unsure where was the relevant paperwork.
Friends Life confirmed they believed the trend could get even worse in the coming years; their research suggests that there will be more than a seven-fold increase in the number of small pension pots in the system by 2017, with 370,000 worth less than £2,000 created each year. This could equate to an extra £74m in pension savings being lost on an annual basis.
This astounding research shows that people are not paying enough attention to their pensions. Friends Life have suggested that, every year, individuals are losing out on significant savings held within pension funds that they are unaware they have.
The survey also indicated that more than 30% of people have pension pots with two or more employers, with a further 5% unsure of how many pots they have.
More than 40% of people responding said they believed they were not paying any charges on their pensions, while a further 26% thought their pension didn’t cost them anything as “their company pays”.
Women were shown to be more apathetic when it comes to pensions and are less likely to know how much their pot is worth, with 72% unaware of the collective value, compared with 64% of men. Also, the study stated women are less likely to keep track of their pension’s documentation, with over 11% having no record of their pensions, compared with 9% of men.
Conclusion
The fear and worry about these pension surveys is, if they are correct we could be facing a whole generation of people who are unprepared for their retirement.
Personally, I believe it is imperative that people are aware of where their money is and what it is doing for them. Too often pensions are deserted and not considered properly before it’s too late.
Please make sure you are aware of the pensions you have, the amount you and your employer are paying, what charges there are and how much each pension plan is worth is essential for retirement planning.
If you want help, just ask a professional. I am an IFA (Independent Financial Adviser) and would always recommend independent advice. Always make sure that the adice you recieve is independent – sometimes companies will dress-up their advice as wealth management, exclusive or other such terms to hide the fact the the advice is NOT independent – be aware.
You should keep up-to-date on your pensions and make sure you track down all investments made via pensions either through previous employers and personal arrangements. I suggest that you maintain a list of all policy details from previous pensions, and keep providers up to date with contact details.
I urge you to think about these factors long before approach retirement – is the quality of your retirement will be linked to your financial security – earlier the planning the better as we would have time to grow the funds and hopefully target any shortfalls
welshmoneywiz 