The Department for Work and Pensions’ Initiative on Lost Pensions
The Department for Work and Pensions (DWP) is making significant strides in developing a new system aimed at assisting individuals in locating lost pensions. This initiative has the potential to significantly boost retirement savings for many. Over time, numerous individuals lose track of their pensions, particularly when they change jobs frequently. With the implementation of automatic enrollment in workplace pensions, employees might accumulate multiple pension pots across various providers, often without realizing it. According to a 2024 report by the Pension Policy Institute, approximately 3.3 million pension pots have been classified as lost, with an average value of £9,470. This figure escalates to £13,620 per pension for individuals aged 55 to 75. The situation is expected to worsen as an increasing number of people acquire multiple pensions throughout their careers. The government is addressing this growing concern through the development of a pensions dashboard, which aims to simplify retirement planning.
What is the Pensions Dashboard?
The DWP is currently in the process of creating a pensions dashboard—an online platform that allows individuals to view all of their pension savings in one centralized location. This encompasses workplace pensions, personal pensions, and the state pension. The primary objective of this dashboard is to help individuals keep track of their pensions, gain insight into their retirement savings, and reconnect with any lost pensions. The dashboard will function by searching across thousands of pension schemes to locate a person’s pensions, potentially uncovering those that they may have forgotten or lost access to.
There will be two distinct dashboards introduced. The first will be a government-operated version managed by MoneyHelper, a free service provided by the government that offers financial guidance. This government dashboard will provide users with a straightforward way to view their pension pots without any additional features, ensuring a secure and trustworthy platform prior to the entry of commercial providers into the market. Following the establishment of the government dashboard, private companies will be permitted to launch their own versions. These commercial dashboards will offer the same essential pension-tracking capabilities but may also include additional features such as pension consolidation services, investment advice, and financial planning tools. Notably, the UK will be the first country to utilize a multi-dashboard system, contrasting with the centralized government versions seen in other nations.
When Will It Be Launched?
The program was initially proposed in 2016 but encountered several delays before being officially “reset” by the DWP in 2023. In March 2024, the government outlined a timeline for pension providers to connect to the system. Large pension schemes are expected to begin joining in April 2025, with medium-sized schemes following suit in 2026. All providers must be connected by October 31, 2026. The Labour government has pledged to carry the scheme forward, and in October 2024, Pensions Minister Emma Reynolds affirmed that it would be delivered according to the timeline set by the Conservatives. However, Reynolds did not provide a specific launch date for public use, stating it was “too early to confirm” and that the dashboard would be made available “at the earliest opportunity.” She did confirm that the MoneyHelper dashboard would precede the commercial dashboards.
The government has committed to announcing the Dashboard Availability Point (DAP)—the official launch date—at least six months in advance, allowing pension providers sufficient time to prepare. Delays in the pensions dashboard project could potentially cost savers money, as the longer it takes to finalize, the more pension pots may remain lost.
Will the Pensions Dashboard Be Delivered on Time?
Industry experts have expressed concerns regarding the timely delivery of both the government and commercial pensions dashboards, warning that further delays could diminish public confidence in the initiative. Former pensions minister Baroness Ros Altmann voiced skepticism about the availability of a fully functional dashboard in the coming year, noting that only a “subset” of pension providers might have the necessary data prepared. She criticized the government for underestimating the “practical difficulties” of ensuring accurate and consistent data and cautioned that without significant investment in IT infrastructure, achieving a reliable system would be “impossible.” Altmann also warned against launching an incomplete dashboard, as inaccurate data could erode trust in the service. She stated, “It is vital that the data people see on the dashboard are correct; otherwise, people will lose confidence in it right at the start. It is a noble project but requires massive investment in underlying administration to function as originally envisaged.”
Conversely, another former pensions minister, Sir Steve Webb, urged the government to proceed with the project, even if not all providers are fully prepared. He remarked, “If you want something that is 99.99 percent perfect, there’s not a cat in hell’s chance. If you want something that will help a lot of people find lost money, then it is perfectly possible.”
Why Are There So Many Lost Pensions?
A 2024 report by the Pensions Policy Institute revealed that the total value of these lost pension pots has reached £31.1 billion, marking an increase of £4.5 billion from the previous year. Approximately 3.3 million pension pots are considered lost, averaging £9,470 each; however, this number rises to £13,620 per pension for individuals aged 55 to 75. Frequent job changes can lead to individuals having several small pots, which, while not lost, could yield better performance if consolidated. In 2023, the government estimated there were 19.9 million pension pots valued at less than £10,000. Of these, approximately 12.1 million pots worth less than £1,000 collectively held a total of £4.2 billion.
One significant factor contributing to this issue has been the increase in pension scheme enrollment following the introduction of automatic enrollment in the UK over a decade ago. This policy was established through the Pensions Act 2008, with implementation commencing in October 2012. Under this system, employers are mandated to automatically enroll eligible workers into a workplace pension scheme. Prior to this, many employees did not join workplace pension schemes due to a lack of awareness or the necessity to manually sign up. To qualify for automatic enrollment, employees must be over 22, below the state pension age, and earn at least £10,000 annually. Both employees and employers contribute to the pension, with the government providing tax relief. As of April 2019, the minimum contribution rates were set at 8 percent of qualifying earnings, with 5 percent from employees and 3 percent from employers.
While this system has led to numerous advantages and an increase in retirement savings, it has also resulted in some individuals forgetting or losing access to pension pots from previous jobs when they switch companies. Additionally, individuals may lose access to prior pension pots when they relocate and fail to update their address with their pension provider.
How to Track Down Lost Pensions
Before the launch of the pensions dashboard, there are still methods available to track down lost pension pots. If you’ve worked for various companies, you can reach out to former employers to inquire about any workplace pensions you were enrolled in. You may need to provide your National Insurance number, employment dates, and personal details.
The government also provides a free online pension tracking service designed to help locate pension providers from past jobs. While this service does not disclose the value of your pension, it does furnish you with contact details for your previous schemes, enabling you to follow up directly. Additionally, reviewing old payslips for any pension deductions can provide the name of your pension provider. Once you gather this information, you can directly contact the pension provider to discuss how to regain access to your pension pot.
