How to track down lost pension pots

broken piggy bank with coins. ...

Nearly 1.6 million pension pots are lying unclaimed, with their owners having lost track.

According to the government, the average person has 11 employers during their lifetime, which means that many may have a dozen or more pensions.

Some may not even realise that they have a pension, thanks to automatic enrolment, while others may have been sold a contracted out policy in the 1990s which they don't currently have access to.

And while some of these pension pots may be tiny, many are not to be sniffed at - indeed, lost pension specialist PensionsLink says that the average unclaimed pension in the private sector would provide an annual income of £3,000 – and for the public sector, the figure's £7,000 a year.

The government is working on a Pensions Dashboard that would give people access to all their pension information in one place, and has signed up 11 of the UK's biggest pension providers to take part.

It's promising a working prototype by March next year that could, it says, help release the £400 million worth of pensions savings that the Department for Work and Pension estimate are currently unclaimed.

"Think of a future where you can compare your pension pots with the touch of a button," says economic secretary Simon Kirby.

"The Pensions Dashboard will unlock a huge amount of information that will help people make the best choices for them, and I am delighted that eleven of the largest pension providers have agreed to work together to build a working prototype by March 2017."

In the meantime, though, there are other ways to track down a missing pension pot.

The Pensions Advisory Service recently launched a new online tool to help people track down lost pensions.

Meanwhile, the Department of Work and Pensions (DWP) also has a free Pension Tracing Service with details of more than 320,000 pension schemes. Just enter your former employers' details, and you'll be given information on schemes you may have paid into.

As a general rule, if you left the job before April 1975, you'll probably already have received a refund of your pension contributions. If you left the employer between April 1975 and April 1988, you will have a pension, just so long as you were aged 26 or over and had completed five years in the scheme. If not, you'll almost certainly have had a refund of your pension contributions and have nothing more to claim.

If you left the employer after 1988, you'll be entitled to a pension, as long as you completed two years' service; with less than this, again, you probably received a refund of your contributions at the time you left.

7 ways to improve your retirement
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7 ways to improve your retirement

If, like many Britons, you have failed to save the cash you need to maintain a comfortable standard of living in retirement, one option is to sell your home and downsize to a smaller property, using the money leftover to cover your living costs.
If moving out of the family home is too much of a wrench, however, the good news is that equity release schemes allow you to stay in your house or flat while still using the equity built up in it to provide some extra cash. The downside of the schemes, which work a bit like mortgages, is that you may not have much left to pass on to any children or other relatives.
But that's a small price to pay for a reasonable standard of living. For more information, try Age UK on 0800 169 6565.

Choosing the right annuity can have a significant impact on your retirement income. And as with most pensions, you automatically have what's called an 'open-market option' (OMO), you can scour the market for the highest annuity rate.
It is worth checking what your pension provider is offering first, though, as some companies offer guaranteed rates for existing customers that are likely to beat those available elsewhere. The Pensions Advisory Service on 0300 123 1047 is a good place to get some free advice.

On retirement, most people convert their pension fund into a guaranteed income annuity that pays out the same amount every month for the rest of their lives.
However, you can also choose an increasing annuity that pays out smaller amounts in the first few years but offers larger payments further down the line. This may prove a wise move if the rate of inflation remains at over 2%.

It is now easier to work later in life because the "default retirement age" has been scrapped.
People approaching retirement age and worrying about money can therefore choose to work for a few years longer - potentially transforming their financial situation. Other than the extra income from working, these people can look forward to higher state pensions, and higher annuity rates due to their greater age.
They can also benefit from bigger tax allowances and the fact that they no longer have to pay National Insurance contributions. Check out this nidirect website for more details.

You could get a much better rate with an impaired-life annuity if you have a medical condition that is likely to reduce your life expectancy.
Incredibly, even snoring, which is a common symptom of Sleep Apnoea could have an impact.
According to figures from MGM Advantage, a man with this condition could receive an extra £12,000 retirement income over the course of their retirement - or £571.44 extra money each year. Click here to find out more.

To maximise your retirement income, it is vital to ensure that you are receiving all the benefits to which you are entitled. These include the basic State Pension, and in some cases, the additional State Pension.
If you are on a low income, you could also qualify for the guaranteed element of Pension Credit, while those with some savings may get the savings element of this benefit. For more information about these and other benefits such as the Winter Fuel Payment, click here.

Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.
The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.

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