£757bn Could Eventually Lie Unclaimed in 'Forgotten' Pensions
The Department of Work and Pensions have revealed the figure which could stay unclaimed as people gather multiple pension pots over their career.
Before the introduction of automatic enrolment, workers had the chance to stick with the same pension scheme for most of, if not all, of their career. This meant that in the grand scheme, the figures left unclaimed through whatever reason remained relatively low; the DWP estimated this to be around £3 billion before the Workplace Pension Reforms.
Fast forward to 2016, and each company is required to enrol their employees into a workplace pension. With each business having a choice of multiple pension providers, people are highly likely to end up with numerous pension pots by the end of their career. The DWP puts the figure potentially at risk at a staggering £757 billion.
They are urging people to keep on top of their pension pots, and if multiple pots exist, weigh-up the pros and cons of transferring them into one pot, ideally your current workplace pension. Many younger workers are less concerned about their pensions as retirement seems a long while off, so they risk forgetting about certain pots and potentially losing those savings.
Which Pension Provider Should I Choose?
As a business, selecting the pension provider for your business is a very important step. The Pension Regulator’s Chief Executive, Lesley Titcomb had this to say for small businesses currently looking at pension schemes; “I strongly believe that the vast majority of the 1.3 million small and micro employers approaching automatic enrolment want to do the right thing. However, many will choose not to seek advice and will need additional support to meet their duties.
“We are committed to providing them with the information they need to make confident choices when it comes to choosing a quality scheme for their employees. My message to employers is clear: prepare early to make the most of the wealth of support available on our website. We are here to help.
“Our research shows that large multi-employer pension schemes such as master trusts and group personal pensions are better placed to meet the standards we believe are necessary for good outcomes for retirement savers. The list we have published today will help employers more easily identify master trusts that have demonstrated they can deliver quality standards, alongside other schemes including NEST.
We’ve Chosen a Scheme, What’s Next?
Once you’ve chosen your selected pension scheme, it’s time to get software to easily manage your pension scheme. The industry’s most comprehensive auto enrolment software, the IRIS AE Suite™ is compatible with a wide range of pension providers, including the most popular companies and the government’s NEST scheme. You can see a list of providers that the software is compatible with here, however if your preferred scheme isn’t listed, speak to us about creating bespoke pension files for your business.
Book your software demonstration of the IRIS AE Suite™ below and see how the UK’s most comprehensive auto enrolment software can take the time and hassle away from managing contributions.