The Hidden Cost of Lost and Forgotten Pension Pots

More than £26 billion in UK pension savings is sitting in lost or forgotten pots according to the Pensions Policy Institute.

It is a figure that keeps growing and it affects workers at every stage of life. Most people do not set out to lose track of their pension, it happens quietly as jobs change, life moves on and older paperwork drifts out of sight. The frustration comes later when individuals start to take their long term financial picture more seriously and discover gaps that should not be there.

For people in their early careers, the issue often starts with frequent moves between employers. Each new role creates a new workplace pension and the small pots that looked insignificant at the time begin to add up. These early contributions matter because they have the longest time to grow. When they are forgotten or left unmanaged, the opportunity cost is felt many years later.

People in their thirties and forties usually feel the impact more directly. This age group often carries several pensions from previous roles and many have no simple way to see them in one place. A pot left with an old employer scheme can fall behind personal goals or sit in a fund that no longer suits their needs. The mental load of trying to find account numbers, old statements or former providers is an extra layer of stress at a time when life is already full.

Later in life, the challenge becomes even more pressing. Individuals approaching retirement need clarity to plan properly. It is difficult to make decisions about drawdown, tax planning or retirement age when several pots are unmapped. A single forgotten pension can reduce confidence and create a sense that decades of saving have been diluted. The idea that a lifetime of work could be scattered across providers is understandably frustrating.

Lost pots also create practical problems, pension providers often merge, brand names change and not every scheme stays active. Some members lose track after moving home because old providers do not have updated contact details. Others simply forget which pension belonged to which job. This is common and it is rarely the fault of the member. The system is complex and was not designed to move with people as careers became more fluid.

Despite this, there are steps that everyone can take to regain control. A good starting point is to request a copy of your annual pension statements and check the details carefully. Most people are surprised by how many pensions they actually have once they begin looking. The government Pension Tracing Service can help locate older pots if you have a previous employer name or rough dates of employment. It is also sensible to keep your contact details updated with all providers so that you continue to receive statements, reminders and key information.

Keeping a simple record of providers, account numbers and login details goes a long way, it does not need to be complex. A digital note or secure folder can make future moves much easier. For many people, reviewing pensions once a year brings a sense of clarity and helps identify gaps before they become larger issues.

The scale of the problem shows that the current system does not work well for the way people live and work today. Careers are more flexible, people change roles more often and financial expectations are evolving. Employees want clarity, control and the ability to manage their retirement savings with confidence. Lost and forgotten pots undermine this and leave many feeling disconnected from their own money.

The good news is that awareness is rising and more workers are taking steps to understand and consolidate their pension savings. Every pot matters and every small action taken now has a long term impact. Understanding what you have, where it is and how it is performing is one of the simplest ways to strengthen your financial wellbeing.

Learn more about Nexum Pensions.