Recent research by Aegon UK reveals that 73% of working people in the UK have multiple retirement/pension plans. Of this group, 17% have lost track of a one of these. The good news is that this is a significant decrease on the 21% recorded in 2016. 

It still means that around 6.4 million people, aged between 22 and 65, in the UK may have misplaced some of their retirement savings. The individual amounts may be small, but the Pensions Policy Institute estimates there is over £19 billion in unclaimed plans in the UK.

This is a universal issue, but data on the size of the problem isn't precise.

The Government Accountability Office (GAO) in the US reported in 2014 that over the previous nine years, "workers had left about $8.5 billion at their previous employers in more than 16 million accounts of $5,000 or less". Including larger accounts, the US government agency estimated that workers had left behind 25 million accounts.

In the Netherlands, a television program in December 2019 put the question to the country's seven largest providers of retirement funds. This resulted in an estimate of 200,000 unclaimed savings policies.

Why do people lose track of their retirement savings?

The Bureau of Labor Statistics in the US estimates that people between ages 56 and 63 in 2016-17 held an average of more than 12 jobs in their lives. This includes about five jobs between the ages of 35 and 52.

Citing these statistics, a report published by the Brookings Institute highlights the difficulty of keeping track of retirement plans from multiple employers, some dating back several decades. Due to the expansion of auto-enrollment ― which helps ensure more workers get access to a retirement saving plan ― some people might not even be aware an account was set for them. 

The main reasons for lost plans in the UK, according to Aegon UK's report, are that a pension provider has been taken over or rebranded, paperwork is lost, or people move address and don't inform their pension provider or employer.

Kate Smith, Head of Pensions at Aegon UK, says peoples are unlikely to have invested much financially or emotionally in smaller retirement accounts, especially if they are some way off from retirement. "But the value of many small pots should not be underestimated, they can still play a fundamental part in planning for retirement and improving financial wellbeing now and in the future."

Time to take action

There are various ways to locate mislaid retirement plans. The UK Department of Works and Pensions has an online tracing service and the Netherlands provides a pension overview. The Brookings Institute notes that several federal agencies in the US offer resources to help find plans, but that they are not comprehensive.

There are also several other steps you can take to hold on to your retirement plans and to find ones that have slipped away:

• Collect any paperwork you can find that relates to a lost plan.
• Consider using an online vault to store key details and documents for each plan.
• Educate yourself about your retirement plans. How do they work, what are you required to do, are they portable? If you don't know the answers, start asking either your employer or the provider of your current retirement account.
• Contact former employers for details of old plans.
• Get independent financial advice on whether it is worth consolidating two or more retirement accounts.