Up to an estimated £3bn of unclaimed benefits are sitting in pension pots across the UK, claims the department for work and pensions.
Widows are missing out on retirement income, as they struggle with the death of a loved one and lose track of their spouse’s pension fund, pensions minister Steve Webb has said.
Earlier this week, he warned that pension funds are “sitting” on tens of millions of pounds owed in retirement income, and that 10,000 widows a year could be “missing out” on their spouse’s pension.
In an interview in a national newspaper Mr Webb warned that too many people had lost track of their rights from pension schemes from past employers, especially if they have moved house or changed job.
Ros Altmann, the newly appointed UK government’s older workers’ business champion, said: “It is certainly a problem that many people lose track of old pension entitlements.
“And, especially if husbands have passed away, widows will often be left without anything from their husband’s pension unless they are aware of what his entitlement was.”
She said that if husbands have died relatively young, a defined benefit pension scheme would provide some money for the widow and a defined contribution scheme could pay out a tax-free sum. However, widows would need to notify the scheme that their husband had died and make a claim for their entitlement.
Too often, however, people fail to keep track of these details and are directed to the government’s free online resource, the Pension Tracing Service, which can help them to find a lost pension.
A DWP spokesman confirmed that Mr Webb made the comments in a interview with The Telegraph on Friday 8 August.
Mr Webb said: “I am keen to make sure that if someone is widowed, she does not miss out on any pension rights that might have been built up by her late husband.
“I want to do what I can to make sure that people are reunited with money that is rightfully theirs.”
Adviser view
Tony Larkins, managing director of Cambridgeshire-based Beacon Wealth Management, said: “It is bound to happen as people are unlikely to know the details of their spouse’s pensions, if they are in or have been transferred. There should be a general register where pensions are linked, according to national insurance numbers, to help people in these instances.”
