Lost savings, ISAs and pensions: our own absent-mindedness is costing us

Millions of financial products have been misplaced, leaving account holders needlessly out of pocket.

There are few things in this world more frustrating than losing something, whether it’s your wallet, your keys, or even your favourite headphones (my own personal bugbear).

But plenty of us lose things that you don’t leave around the house too, like financial products.

And doing so can prove even more costly than a misplaced wallet.

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Losing track of savings and bank accounts

A study by NS&I has found that as many as one in seven of us may have lost track of a financial product, ranging from bank accounts to savings accounts and ISAs.

A whopping 43% reckon they have lost track of a bank account, 28% believe they have misplaced a traditional savings account, 17% have lost track of Premium Bonds and 15% have been separated from an ISA.

Around one in 10 believe they have lost track of children’s savings accounts, meaning that their kids miss out on the money they have set aside for them.

Losing track of a workplace pension when you change employers is one thing, but why would a bank account or ISA slip through the cracks?

According to NS&I’s research, there is a whole host of different reasons identified, including losing passwords and account codes, having products bought for you as a child, having too many products with too many different providers and having too much paperwork.

If you think you’ve lost a bank account or savings account then it’s worth a look at MyLostAccount.org.uk. It’s a joint initiative from the Building Societies Association, UK Finance and NS&I and is free to use.

NS&I reckons that so far it has reunited users with more than £770 million.

Losing track of pensions

Incredibly, UK savers have lost track of around 1.6 million pensions according to a study from the Pensions Policy Institute and the Association of British Insurers.

These lost pots aren’t tiny either – the organisations reckon that each of these pots contains a massive £13,000 on average, a sum that could be genuinely life-changing when it comes to retirement.

In truth, the numbers could be even higher, as they didn’t look into pensions held in the public sector, or with trust-based schemes which may be run by employers.

Why we lose our pensions

A big factor in these forgotten pensions is our work habits. With the typical person taking on 11 jobs over the course of their working life, it’s only too easy to lose track of a person started with a former employer.

In truth, the introduction of workplace pensions is only likely to add to this, with all employers required to open a pension and contribute to it on behalf of their staff.

Another significant factor in losing a pension is moving house.

If you fail to update your various pension providers on your new address details when you move, then all correspondence will end up in the bin, rather than keeping you informed on your pension pot.

Pensions reunited

The ABI argues that insurance firms spend a small fortune each year trying to bring together savers with their lost or forgotten pots.

Last year more than 375,000 attempts were made to contact savers, which resulted in them being reunited with £1 billion in pension assets.

That’s an incredible amount.

But the ABI points out this whole process would be a lot easier if the government goes through with the proposed Pensions Dashboard, which would allow everyone to see their pension savings –  including the state pension –  in a single place online.

Of course, the Government seems to be losing faith with the Pensions Dashboard, with question marks over whether it will actually go ahead, particularly as it is due to launch next year but there remain few concrete details.

The dashboard is a great idea, with the potential to positively impact the retirements of thousands of people. For the government to back out now would be unforgivable.

I think I’ve lost my pension

If you believe that you may have lost track of a pension, then you can act to try to get your hands on that cash again.

The Government offers a free pension tracing service which you can use online or over the phone at 0345 6002 537.

You have to provide the name of the employer or the pension provider, and you’ll then be given the relevant contact details so that you can chase up any mislaid pensions.

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