Tracking down old plans
A Simplified Money Case Study
You know you've got a pension.
You know its worth something.
But you don't know where it is. And have no idea where to start looking...
Believe it or not, quite a lot of people lose track of old policies. In fact, one provider has just spent £2 million tracking down over 36,000 customers* they (or rather, their legacy businesses) had lost track of. And those policies were worth a total of around £14.5million.
The problem is, over the past decade or two, there has been a lot of consolidation in the pension industry - in financial services as a whole, in fact. Indeed, some plans have been through the hands of a whole series of different providers, as small provider is swallowed up by medium provider, which is then swallowed up by a larger one and a larger one...
And in the meantime, many thousands of us have moved house.
Stephen's pension was with a provider that no longer existed
He'd moved house. And he'd forgotten to tell the old provider what was going on.
So none his statements, updates and newsletters ever arrived.
Question was, where was it now?
Despite all the above, in Stephen's case, the situation was actually quite straightforward. We knew his old provider We knew who'd bought them. And not because we've been around forever and remember all this stuff (though that's probably also true). It was just because we quickly understood where to look.
Turns out it was swallowed up only the once, back in 2006. All we had to do was get a letter to them, with proof of his ownership. Within a couple of weeks he was reunited with his money.
Even better news for Stephen, once we found out where it was, we also realised he was paying about three times more than he needed to - and his return (partly because of those charges) wasn't great. So we also helped him move it.
He is now the owner of an up-to-the-minute, low-cost, very flexible pension plan, with a provider of notable reputation. And (for the record) he's feeling much more comfortable about everything.
What it means for you
Tracking down older pension funds is important for lots of reasons. But most importantly:
It's your money!
If you don't know where that money is, you don't know what charges you are paying.
That doesn't mean all old products are 'bad'. Some providers bring old plans into line with their later ones, and cut charges or streamline investment as part of their take over.
However, unless you know exactly what's going on, how can you be sure?
A pension is a long term investment. The fund value may fluctuate and can go down.
Your eventual income may depend upon the size of the fund at retirement, future interests rates and tax legislation.
Tax planning advice is not regulated by the Financial Conduct Authority