AJ Bell is today pleased to announce the launch of its new pension finding tool, designed to help consumers track down lost pension pots.
Millions of people hold lost or forgotten pension accounts, often having setup the product decades ago either themselves, through an employer or with a financial adviser.
Keeping track of pension accounts can be difficult, especially when individuals change address, switch employer or take a married name. It means many have lost track of old pension policies and the provider may no longer be able to contact them with annual statements.
To complicate matters further in many cases the company that originally sold the pension product has since been absorbed into another business and the brand is no longer active. It can make it challenging for individuals to work out which business now administers their pension account.
Estimates vary but tens of billions of pounds is believed to be held in lost pension pots. The Pension Policy Institute last year calculated that over £26bn of UK saver’s money is stranded in lost pension accounts*.
AJ Bell’s pension finding tool helps to address this challenge and is free for anyone to use. The service helps users trace pensions held in their name, using a UK National Insurance number and basic employment details, telling them which company is responsible for the pension today and how much is invested. Individuals just need to visit www.ajbell.co.uk/find-my-pension or google ‘AJ Bell find my pension’ to use the service.
Once lost pension pots have been found, users can choose to consolidate their pots into an AJ Bell pension if they wish, making their retirement savings easier to manage in one place with a wide range of fund, shares and ready-made investment solutions available to them.
Kevin Doran, managing director at AJ Bell:
“Free to use for anyone that thinks they may have a lost pension account, or who just wants some help to get details of all their pension products together in one place, our pension finding tool addresses a multi-billion-pound pension problem.
“Getting control of your pension money is crucial in order to ensure your retirement plans are on track. Consolidating old pensions into a modern platform account can help you dramatically reduce charges, give you access to a choice of shares, funds or ready-made investment solutions, and allow you to manage your account online or by phone.”
Old pension products
Millions of pension policies in UK are held in old pensions, often through ‘legacy’ providers closed to new business. In many cases the original brand through which products were sold is no longer actively marketed, making it difficult to know where your money is held.
If the provider doesn’t have up to date contact details for account holders – a common problem – then people may not even be aware their pension policy was sold to another provider.
An FCA report published in 2019 looking at the non-workplace pensions market found that pensions setup before the 2013 retail distribution review (RDR) often charge around 2%, with some people paying as much as 2.4% of their pot value in fees**.
AJ Bell’s Pension finding tool is likely to be particularly useful to these pension savers who have lost track of their pensions, aren’t sure where they money is held and who could benefit from lower charges.
Pension dashboards failure
The government-led pension dashboard project promised to deliver an online service allowing consumers to view all of their pensions in one place.
Beset by delays, the project has now been postponed beyond the end of this parliament, raising doubts about whether it will ever be available to the public.
AJ Bell’s Pension finding tool will help to meet the gap, helping consumers track down their private pensions and view them in a single dashboard (see image below).
Cost savings
AJ Bell offers one of the most competitively priced pension accounts in the UK market, with custody charges of just 0.25% and no fees on funds over £500,000.
Cutting charges can be one of the most effective ways to boost your retirement pot.
Calculations by AJ Bell show that a £100,000 pension pot switched from a product with total charges of 1.5% to a platform where charges total 0.75% (for custody and funds combined) could be worth £11,000 more in in ten years’ time:
|
|
Difference vs 0.75% charges |
||
|
|
2.40% |
1.50% |
1% |
|
After 5 years |
-£9,883 |
-£4,574 |
-£1,540 |
|
After 10 years |
-£23,318 |
-£11,036 |
-£3,763 |
|
After 15 years |
-£41,287 |
-£19,971 |
-£6,894 |
|
After 20 years |
-£65,019 |
-£32,127 |
-£11,227 |
Source: AJ Bell. Based on a £100,000 pension account and investment growth before charges of 5% per year
AJ Bell pension-finding dashboard:
(Illustrative example only. Not a real customer)