Private pensions lost by workers who change jobs

Posted on November 27th, 2010 | Categories - Pensions

Pension pots are being forgotten by workers who job-hop.

Private pension schemes are not being combined by workers who change their jobs throughout their careers.

Retirement funds are being lost as workers switch jobs more frequently, according to research by insurance firm Aviva.

The pensions survey found that job-hopping has become the norm for most people, with one in three working for up to five different employers during their lifetime. However, workers are failing to keep tabs on their accrued pension pots and do not know the details of the scheme they have paid into.

Clive Bolton, ‘at retirement’ director for Aviva, said: “The modern day job market is much more fluid and this is having a direct impact on the pension landscape. People are now finishing their working lives having had several employers – and several private pension schemes. It is more important than ever that people make best use of all the funds they have saved”.

The survey highlighted that almost a third of UK workers contribute to two or more pension schemes during their lifetime but 60% are unaware that they can combine their separate private pension pots at retirement. Just over 50% of British people do not know how to access their pensions with almost 40% failing to realise that they need to take action with their savings when they move to a new job.

The poll also found that 31% of participants think that their employers will deal with everything related to their retirement payments when they begin a new role. Almost the same percentage of respondents said they refuse to worry about their pension until they get closer to the age of retirement.

Mr Bolton said: “When it comes to retirement, not only should people be shopping around for their annuity, they should also be combining the multiple pension pots they have accumulated over their working lives to help maximize their retirement income”.