A quarter of workers have lost track of small pension pots, says charity

Age UK said that a shift in national working patterns, which will see today's savers having worked for a considerable number of employers by the time they reach retirement age, was one of the reasons for a growing pensions "black hole". The charity said that 37% of respondents to its survey aged between 18 and 44 had already lost track of a pension, compared with 23% overall.

The charity added that respondents were both sceptical and uncertain about long-term financial planning, with 12% saying that they "don't think there is any point as nothing is guaranteed". In addition, 24% of those surveyed said that they "could not afford to" save for retirement despite knowing that they should.

"It's really important we all set aside time to keep on top of our personal admin, such as organising paperwork and keeping details of any financial products safe and secure," said Age UK's Lucy Harmer. "This is especially crucial for pensions as it may be some years down the line until they need to be accessed."

"With the number of jobs we have over a lifetime increasing, it's likely that people will accumulate several small pension pots. In many cases these bring a less fruitful income in later life than one large pension pot," she said.

According to Age UK's findings, a quarter of those aged between 25 and 34 have already worked for a similar number of employers as the average person aged over 65 has worked for during his or her entire working life. As these workers will likely remain in work for another 30 years, they will "almost certainly" have a variety of pension pots as they get older. The number of 'small pots' workers will accumulate as they move between jobs will increase under the Government's programme of automatic enrolment, which will see most workers enrolled in a workplace pension scheme by 2017.

The Government has proposed a 'pot follows member' approach to aggregating small pension pots accumulated as a result of automatic enrolment. Subject to legislation, this model will see auto-enrolment pension pots automatically transferred to a new employer's scheme when the worker changes job. However, this method had been criticised by pensions experts and lobbyists, who have argued that savers could lose out as a result of related administrative burdens and transaction costs. It will also not apply to small pots accumulated before auto-enrolment began.

Age UK said that 30% of those surveyed would try to trace a pension if they realised that they had lost track of it, but that many were unsure about how and where to begin. The Department of Work and Pensions (DWP) offers a free Pension Tracing Service which can track down addresses of pension providers for scheme members. However, it will then be up to that scheme member to make any further enquiries.

"While some measures are being taken by the Government to account for smaller pension pots likely to be created under automatic enrolment, existing pots that we may already have are not being accounted for," Lucy Harmer said. "This makes it more important than ever that we keep on top of what we have already accumulated."

"We strongly advise people to seriously think about planning for retirement and the kind of lifestyle you want - it's never too early," she said.

Nearly half of the missing pensions identified by the survey were simply "lost in the mists of time", according to Age UK, while 20% of respondents missing pensions said that they had lost their pension paperwork. 10% of those who had lost track of a pension said that they had moved jobs too many times to keep track, Age UK said.