A substantial proportion of people aged 18-34 do not know where all their pension pots are or how much they have saved, as a provider has warned of “an epidemic of lost pots”.
Research from the pension-finding platform Raindrop revealed that just 17 percent of young people (18-34 year olds) know exactly where all their pensions are.
Close to a fifth (19 percent) said they have no idea how much they have saved for retirement, which is almost double the figure for older people aged over 55 (10 percent).
The findings suggest that the generational pension gap is set to widen.
Worrying figures from Scottish Widows show that 47 percent of people aged 22-29 are currently on track for a less than minimum lifestyle in retirement. The data, published in the pension provider’s Retirement report 2024, showed that a significant number of young savers will not be able to cover their basic needs and could face poverty in retirement.
Raindrop warned that in addition to not saving enough for retirement, the same age group are at greater risk of losing pension pots over their working years.
As people change jobs more frequently than in the past, younger workers are likely to accumulate more pension pots over the coming years. This means that the number of pots they could lose could increase. Three in ten people aged 18-34 have already had three or more jobs in their working lives, so could have multiple pensions. On top of this, 17 percent plan to move to new roles every few years compared to just 2 percent of workers aged over 55.
The Pensions Policy Institute (PPI) has estimated that that £31.1 billion is sitting in lost pension pots and there are almost 3.3 million lost pots in the UK, with an average value of nearly £9,500.
The imminent launch of government’s pension dashboard (October 2026) will enable more people to find lost pots, with 19 percent of young people saying they plan to use the service. However, people don’t necessarily want to wait for the dashboard launch as 18 percent of young people said they would prefer to use a pot finding service offered by their bank or pension provider.
Vivan Shridharani, co-founder and CCO at Raindrop, said: “Young people face a future pensions crisis as the lost pots issue is set to explode in the coming years.
“Billions of pounds are already wasting away in lost pots – millions of young savers risk losing track of pension savings as they increasingly switch roles every few years and start paying into new pots. The traditional career path of a company for life and just one pension is virtually extinct – the number of lost pension pots is accelerating partly as a result of more flexible and diverse career choices of younger employees.
“It’s vital that people take control of their retirement savings – however, tracking down old pots is often hugely complicated and time consuming. Pension-finding solutions can play a key role in solving the lost pots crisis, supporting with consolidation and helping people achieve the retirement they want.”
- For more on how HR can help employees make the most of their pension benefits, check out the Benefits Expert Guide to DC Pensions.
