Pension savers urged to act now if they want to avoid this ‘nightmare’ scenario | Personal Finance | Finance

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have been encouraged to look at consolidating their different pots as many Britons now have several funds to keep track of.

Research from interactive investor found one in five Britons aged 18 to 34 have five or more pension pots while almost 10 percent of those aged 35 to 45 do.

Alice Guy, head of pensions and savings, said: “The worrying findings reveal that one in five 18–34-year-olds already have five or more pension pots, building up an admin nightmare for the future.

“The changing nature of the workplace means that employees regularly switch jobs, and the messy current system means they are forced to start a new pension pot each time, collecting multiple pension pots as they move through their working life.

“With final salary pensions dwindling in the private sector, the issue of multiple pension pots seriously impacts on younger generations who often move jobs more and have less access to final salary pensions than older workers.

“The responsibility is increasingly on the individual to ensure they have a big enough pot to last them throughout retirement and having multiple pension pots makes that planning considerably harder.”

The Government is currently drawing up plans for a ‘pot for life’, where workers can ask for their workplace pension contributions to be paid into an existing pot.

Ms Guy said: “For individual pension savers, there’s no need to wait for pension reforms.

“Instead, you can take action now by looking for and combining old workplace pensions. Bringing your pensions together makes it much easier to make retirement decisions as you can see all your pension wealth in one place rather than scattered across multiple providers.

“With the onus increasingly on individuals to provide for their own retirement, taking control of your pension and combining your pension pots helps you see if you’re on track for the retirement you want.

“It also makes it easier to manage your pension wealth and keep an eye on your pension providers’ fees and investment performance.

“If you’re thinking of transferring your pension, then check first to make sure you won’t lose out on any valuable benefits.”

People planning for their retirement may also want to factor in their income from their state pension.

State pension payments increased 8.5 percent from April, with the full new state pension rising to £221.20 a week.

You can check how much state pension you are on track to receive using the Government’s state pension forecast tool.

For the latest personal finance news, follow us on Twitter at @ExpressMoney_.

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