UK adults have “worrying levels” of knowledge and understanding regarding their pension savings, with almost one in five admitting to have lost track of at least one pension pot, it has been revealed.

According to new research by wealth management group Tilney, almost one in five UK adults have lost track of at least one pension pot as they move jobs. While the average person has worked for 5.8 employers by the time they are over 55, this is set to rise as 18-34 year-olds today have had over 4 jobs on average, leading to a greater number of pensions accrued.

Reasons for losing track of a pension, the research noted, include: “never kept an interest”, “lost paperwork” or “forgetting to notify providers of address changes”. Of those who had moved home, 13 per cent had never notified their pension providers and 12 per cent were unsure if they had.

When asked how they would find a lost pension, 32 per cent said they would contact their previous employer, while a fifth, 20 per cent, said they had no idea how to find it.

Tilney’s research also highlighted high levels of disengagement with pension savings. Notably, a quarter, 25 per cent, of UK adults were unable to differentiate whether their current plan is a defined benefit or defined contribution pension. One in five survey respondents said they have never checked their current workplace pension and 13 per cent have no idea how much it is worth.

In addition, 47 per cent of men and 62 per cent of women admitted that they are unaware where their pension is invested and 38 per cent do not know which company is managing their current pension scheme. In terms of pension specific terms, 62 per cent of respondents had no idea what the annual pension allowance is and 67 per cent admit they find pensions terms confusing.

Tilney head of retirement planning Andy James commented: “The research shows the worrying level to which the private pensions of millions of Britons are in complete disarray.

“It is all too easy to lose track of a pension due to a combination of inertia, disinterest fuelled by excessive technical jargon and absent minded administration. Tracking down missing workplace pensions can be particularly problematic where a previous employer from many years past has been acquired or gone bust, moved or re-branded. But it really is vital to track down these pots of assets and to determine whether they remain fit for purpose.”

In addition, James advises that these scheme members should start by tracking their missing pension from the government’s Pensions Tracing Service. He also notes that the Department of Work and Penisons’ pensions dashboard, that aims to provide a consolidated view of each individuals’ pension savings is “urgently needed”.

James concluded: “Of course tracking missing plans down is only a first step in sorting out a pension mess. Existing plans need to be reviewed to make sure both the investment approach is suitable and the returns being delivered are up to scratch and that the plans are able to cope with the improved flexibilities introduced in recent years, including the ability to pass these on after death. Many old schemes are not able to cope with these new and appealing features and really do need to be reviewed.”

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