The Forgotten Pension
A study conducted at the end of 2015 by the Association of Accounting Technicians (AAT) found that over the course of the average UK work life, the average worker would have worked at least six different jobs, be late for work 141 times and had at least 2 bad bosses! Some interesting statistics there for you to get your teeth into, especially if you knew how many cups of tea you would have made over that period.
The reason I have noted the first statistic down in particular is because there is a good chance you would have set up a pension whilst working at each job. As time goes by your personal and employer contributions continue to be added into your pension scheme, until of course you leave the company and go forward to further improve your career. It can be agreed that whilst you are in your thirties and forties, it is easy to overlook your pensions as at that time it is not an urgent priority, especially if you have a young family. So what this means therefore is that as you switch jobs, it is most likely that you would have forgotten about a few of those pensions.
We recently had a client who came to us asking for advice on five different pensions that they had accumulated over the years, and wanted to know what to do with them. The advice of course will depend on your personal circumstances, especially if you are over 55 years of age, as you will have the ability to access your pension benefits. If you do not want or need to access your pension, it might be worth us looking to see if it would be beneficial to consolidate these into one pension so that you have more administrative control and can allow you to keep a better eye on the performance of your pension. Alternatively you could take 25% of your pensions as a tax free cash lump sum and use this to pay off your mortgage or purchase an around the world cruise. Bear in mind however if you start to take an income from your pension you will limit how much you can contribute into them, so always take financial advice before making a decision.
Ultimately the value of these pensions will be the deciding factor. However, this is not to say if it is small you cannot do anything about this. Another client recently was able to withdraw an old work place pension without any impact because the value was less than £10,000. This is known as a Small Pots Payment and your previous pension scheme administrators may be able to implement this for you.
Depending on how long and how much you contributed into each of these pensions, they could potentially be worth transferring and consolidating. Which when you consider the fact that there are around three billion pounds remaining in unclaimed pensions, it might be a good idea to look through your old paperwork.
I urge you therefore to have a think and check what old pensions you may have lurking around. Every penny counts and I am sure you do not want your pension to fall into the unclaimed pension statistic.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.