Legal & General has introduced a service to help people track down lost or forgotten pension pots as well as consolidate them.
L&G Retail Retirement’s tracing service uses basic details to search an extensive database of providers to locate pensions and present them on a dashboard.
The tracing-only service has a one-off fee of £100.
After using the service, savers will have the option to get guidance or speak to a financial adviser; do nothing or to consolidate their pensions into one Legal & General retirement product.
If they choose to consolidate within six months of using the service L&G will refund the fee.
Tracing is free for those choosing to consolidate their pensions with L&G from the outset.
According to data from the Association of British Insurers, there are 1.6m pots unclaimed, worth £19.4bn.
But L&G said it is currently hard for savers to track their pensions as they either have to go it alone, use the government’s online Pension Tracing Service, which requires a degree of knowledge of pension and employment history and relies on customers to contact the providers themselves.
Research from L&G found that, of those who have tried to track down their lost pension through this service, about a third (32 per cent) did not have the right details and 16 per cent found it too complicated.
Emma Byron, managing director of Legal & General Retirement Income, said L&G’s service seeks to “make life simpler” for people who need help locating their pots, without them having to have their old pension statements to hand.
Ms Byron said: “We also recognise that not everyone is ready to make that consolidation decision until they have a better understanding of all their pension savings, which is why we’ve created a ‘stand-alone’ tracing option for customers unsure of their next steps.
“People now have control over their own retirement planning, which is great, but for the many non-advised consumers that means they need simple, low-cost and transparent products.
“Having launched our self-service drawdown product earlier this year, based on the FCA’s investment pathways, we are now continuing to lead on innovation with our tracing and consolidation services.”
L&G’s research, which surveyed 2,008 non-retired adults aged 45-65, found more than half of savers have more than one pension pot but, of those, only 17 per cent have already consolidated.
Ms Byron said: “There are a number of reasons why it can make sense to bring your pension pots together. If you are still saving, it gives you a clear view of the charges you are paying and means you can choose to bring a higher charging pension into one with lower charges.
“You can also clearly see what you have and its worth, to ensure you are on track for the retirement you want.”
amy.austin@ft.com
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