The UK’s pension pot predicament – a quarter of over 55s have four or more pension pots

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Under embargo until: 00.01 Tuesday 3rd December 2013

  • Three in five (60%) people have had at least four jobs in their lifetime
  • A quarter (25%) of over 55s have four or more pension pots
  • Over a third (39%) would like their pension pot to automatically follow them when they join a new company
  • Four in five (81%) employees would worry if their pension pot followed them to a poorly performing scheme
  • 86% would worry if the charges on their new scheme were higher than their old scheme

Three in five (60%) British workers have already had at least four jobs in their lifetime, with one in ten (12%) over 55s having worked at more than ten different places according to workplace pensions provider NOW: Pensions.

As a result, over half (56%) have more than one pension pot and nearly one in ten (8%) have four or more – a figure which rises to one in four (25%) for those aged over 551.
When it comes to keeping track of these pension pots there is room for improvement as almost a third (32%) admit they don’t know where all their pension pots are and a quarter of those surveyed confessed that they don’t always inform all their pension providers when they move house.

With all British workers over the age of 22 and earning more than £9,440 set to be automatically enrolled into workplace pensions and increasing numbers moving jobs more regularly, the number of pension pots each person has is set to grow exponentially.

To tackle the growing issue of small pension pots and to reduce the risk of these pots being forgotten about, Pensions Minister Steve Webb is proposing that people’s pension savings should automatically transfer to their new employer’s scheme when they change jobs.

Half of those surveyed (50%) said they would like to consolidate their small pension pots into one and over a third (39%) said they would like their pension pot to automatically follow them when they went to a new company rather than having to set up a new scheme with their new employer.

But, four in five (81%) said they would worry if their pension pot was transferred to a scheme which didn’t perform as well as the old one and 86% said they would be concerned if their pot was automatically moved into a scheme where the charges were higher. Concern over charges is even greater for over 55s with 89% stating that they would be concerned if their pension pot followed them to a higher charging scheme.

Morten Nilsson, CEO of NOW: Pensions, commented: “No matter how long you plan to stay in a job, you should always save in the workplace pension plan. When you pay in, your company pays in so it’s like getting a pay rise and the sooner you start, the greater chance you have of a comfortable retirement.”

Nilsson continued: “Automatic enrolment will lead to an explosion in the number of small pension pots. In most cases, having one big pot is better than having lots of small ones that can be eaten up by charges. But, while there is a lot of logic behind your pension pot following you to your new employer, it’s imperative that safeguards are put in place to prevent people’s hard earned pension savings being automatically transferred into an unsuitable scheme with high charges.

“So that savers can feel confident that wherever their pot goes, it will always be in a scheme which meets certain quality standards, we would like to see schemes used for auto enrolment officially licenced.”

“The government also needs to ensure that the transfer rules and the processes are efficient so members’ pots are not eroded by the costs of consolidation.”

Michelle Cracknell, chief executive, The Pensions Advisory Service said: “Each month The Pensions Advisory Service receives around 200 calls and queries from people who are unable to trace their pensions. The number of people who spend their working life with one employer are now few and far between. As the NOW: Pensions research highlights, many people change jobs several times over their working life and, combine this with moving house and people being automatically enrolled into schemes, the risk of losing track of your pension is high. Until this issue is addressed, the need for somewhere for people to get free, independent and expert help is more important than ever.”

–     Ends     –

For further information:

Amy Mankelow
NOW: Pensions
Tel: +44 203 640 9075
amy@nowpensions.com

Shirley Collyer / Jennifer Stevens / Victoria Leyton
Lansons Communications
Tel: +44 207 294 3615 / +44 207 566 9723 / +44 207 294 3620
nowpensions@lansons.com

Notes for editors:

Research conducted by Censuswide in September 2013 with 2,000 respondents, aged over the age of 21 who have a workplace pension.
NOW: Pensions www.nowpensions.com

@NowPensions

NOW: Pensions is a multi-employer trust. The investments are managed by NOW: Pensions Investments, a subsidiary of ATP in Denmark, and the administration is carried out by Paymaster, an established UK third party administrator.

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Nigel Waterson, former Shadow Pensions Minister
  • Imelda Walsh, former Group HR Director of Sainsbury’s
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Christopher Daykin, former Government Actuary
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors

NOW: Pensions is committed to developing a better workplace pension provision in the UK by offering a simple, high quality, cost efficient and systematically risk managed pension product that delivers better retirement savings for UK employees. With over 45 years’ experience providing Denmark’s working population with stable and consistent pensions returns, NOW: Pensions is set to transfer the knowledge acquired in Denmark to the UK pension market. Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.
The ATP Group www.atp.dk

Arbejdsmarkedets Tillaegspension (ATP) / Danish Labour Market Supplementary Pension is a statutory pension fund. It was established as an independent entity in 1964 with the objective of ensuring a greater retirement income for the Danish population. ATP has since developed to become the largest pension fund in Denmark. Together with the tax-financed basic state pension, ATP provides basic income security in old age for the Danish population.

ATP covers almost the entire Danish population representing 4.7 million members and 160,000 employers. In addition to the ATP Scheme, the ATP Group administers a number of pension and social insurance schemes, including several for the Danish state.

The ATP Group total assets under management amounted to DKK 624 billion/approximately GBP 68.4bn (i.e. assets: DKK 540 billion/GBP 62.3 billion + reserves: DKK 84 billion/GBP 9.2bn) at 31 December 2012. ATP invests in a wide variety of assets globally. Investment categories are broadly: equities, interest rates, credit, inflation and commodities.

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There is a need for a member-centric solution designed for ease of use with low costs and cutting edge investment strategy, which delivers long term stable returns. ATP's in-house investment capabilities, combined with our novel and innovative… — Lars Rohde, Governor of the National Bank of Denmark and Former CEO of ATP Group
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary
NOW: Pensions is supportive, easy for our employees to understand and uncomplicated in terms of its implementation. Its structured approach removes the complicated investment choices & makes auto-enrolment a straightforward and simple process. — Mark Manaton, Managing Director, Blue Arrow Group
I am backing NOW: Pensions, the ATP project, because I believe it will encourage transparency, low costs and decent returns for millions of British employees. — Nigel Waterson, former Shadow Pensions Minister
“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First