Over 3.6m Brits have lost track of their pension pots

More than 3.6 million Britons have no idea how many pensions they have and risk paying more in fees than they need to, according to research by Scottish Widows.

The pension provider called for a ‘system overhaul’ to help savers get control of their finances and make the pensions system more efficient.

Although Scottish Widows noted that the pensions dashboards will allow people to see all their pensions in one place, it warned that dashboards would not solve the issue of savers paying fees to multiple providers.

To help remedy this, the firm urged the government to change the system to allow small pension pots to be automatically consolidated, claiming it will lead to lower charges, reduced bureaucracy and ensure savers’ money is working as hard as possible for them.

Scottish Widows stated that although savers already have the option of combining their pensions, 10 per cent have no idea how to do this, while 12 per cent said it was “too much hassle”.

More than two-fifths (44 per cent) of respondents said they have never bothered to track down savings from a previous employer, while 72 per cent supported the introduction of a new system that would automatically consolidate small pension pots as they move jobs.

“Auto-enrolment has been a roaring success because it didn’t require people to take any action,” commented Scottish Widows head of pensions policy, Pete Glancy.

“A similar approach to auto-consolidation could be equally successful. It would reduce the number of savers paying multiple fees unnecessarily, and could also help the industry reduce costs, meaning the fees paid by savers would fall too.

“This new research shows that people are warm to the idea of a government intervention that would act to promote their best interests. Undoubtedly, consolidating a savers’ pensions into one pot would bring them much closer to their money, increasing the sense of ownership and control.”

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