In our weekly series, readers can email in with any question about retirement and pension savings to be answered by our expert, Tom Selby, director of public policy at investment platform AJ Bell. There is nothing he does not know about pensions. If you have a question for him, email us at money@theipaper.com.
Question: I lived and worked in the UK and as things stand, I have 12 years’ entitlement to the state pension when I retire. I left the UK and returned home to Ireland in 1996. My question is how can I find out if I have a pension with any of the companies I worked for during my time in the UK? Is there a central database with this information or would I have to contact each company I worked for?
Answer: It’s easy to lose track of your pensions, particularly if you switch job, move home or, as in your case, locate to a different country. In fact, over 3 million people in the UK are estimated to have £31bn sitting in lost retirement pots in the UK, according to think tank The Pensions Policy Institute.
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Automatic enrolment, which requires companies to offer qualifying employees a pension and enrol them into it unless they choose to opt-out, is expected to exacerbate this challenge in the coming years.
As things stand today there is no centralised database containing all your pensions information. You can, however, use the government’s pension tracing service to find the details of a scheme you may have belonged to from your time working in the UK, even if you don’t have the contact details.
The more information you have to hand – such as the name of your previous employer or when you were in the scheme – the better the chance the service will be able to find your retirement pot.
The service will only tell you the contact details of the company administering your pension, however – it will be up to you to get in touch with them to get the relevant information to find your pot.
There are alternatives available from private providers which can do the legwork of finding lost pensions for you. AJ Bell (full disclosure – my employer), for example, has a free ‘Pension Finder’ service available for UK residents which will locate your pensions and provide you with details of your plans.
You’ll just need to provide a bit of information about your old employer and when you worked for them.
There are also reforms coming down the track which are designed to make it easier for you to find your old pensions. In particular, a ‘Pensions Dashboard’ operated by MoneyHelper, a government-backed guidance service, is due to launch in 2027, allowing you to see all your pensions in one place online.
This will just provide the details of your pensions, however, so if you want to interact with them you’ll need to get in touch with the firm administering the scheme.
Should you consider combining your pensions?
There are plenty of reasons why combining your pensions with a single provider can be a good idea. Most obviously, a single retirement pot is much easier to track and manage than having various pensions with different providers. You could also benefit from lower costs and charges, increased income flexibility and more investment choice by switching provider.
Older pension schemes, for example, often charge more than modern pensions, while plenty of workplace schemes don’t offer a full range of retirement income options or restrict your investments to the firm’s own in-house funds.
While a charge cap of 0.75 per cent applies to the default investment option in auto-enrolment workplace pensions today, many pension policies carry higher fees.
The impact of reducing your pension charges can be significant, particularly over the long term. Someone combining three pensions with charges of 1.5 to 0.75 per cent could boost their pension pot by over £7,000 over 10 years or £20,000 over 20 years if they were to switch to a single, lower cost account.
Things to consider when combining your pensions
As you are a non-UK resident, if you are considering combining your pensions with a UK provider you will need to check they are willing to accept you as a customer (lots of providers require you to be a UK resident).
One option would be to move your pensions to a provider in your country of residence, which would have the benefit of removing ‘currency risk’ (I.e. the risk of movements in exchange rates negatively impacting your pensions).
If you decide you want to combine your pensions with a single provider, assuming the pensions you’re combining are ‘defined contribution’ pensions – where you build up a pot of money which you can access from age 55 – the process for UK residents should be relatively simple (although it may be a bit more complex for you as a non-UK resident).
Note that the minimum age you can access your pension is set to rise to 57 in 2028.
If you have a ‘defined benefit’ pension valued at £30,000 or more, you will need to take regulated financial advice before transferring.
Where defined contribution savers build up a pot of money, defined benefit schemes provide an income for life from a set date, usually based on your salary and the number of years you have been a member of the scheme.
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Lots of providers will only accept a transfer from your defined benefit scheme where the adviser has recommended you do this.
You’ll just need to choose a provider to consolidate your pensions with and get the details of the pension or pensions you want to transfer over. Once you’ve given the relevant details to your new provider, they should do all the legwork for you.
Before transferring any old pensions, you should check there aren’t any valuable benefits attached which you may lose or exit charges that will be applied. Your provider should be able to tell you if this is the case.
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