According to a new report by the UK's Pensions Policy Institute, a leading independent think tank, up to £20bn of retirement funds could be unclaimed by up to 1.6 million people.
The research identified about 800,000 lost pensions, with a total valuation of nearly £10bn. The data used came from 12 of the UK's largest insurers who cover approximately half of the UK's defined contribution pensions market. This points to the potential of up to £20bn of retirement cash could be left unclaimed across the whole of the pensions market.
Dr Yvonne Braun, director of long-term savings and protection at the Association of British Insurers said that "These findings highlight the jaw-dropping scale of the lost pensions problem. Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers."
"The industry has stepped up its efforts to re-connect savers with their lost nest eggs, developing a new framework launched earlier this year to help pension providers trace 'gone-away' customers more consistently."
The issue of lost pension pots has become more apparent since the successful introduction of auto enrolment which sees all eligible UK workers being auto enrolled into a workplace pension scheme by their employers. With changing work patterns that see people have many more jobs throughout their career, the number of people with multiple pensions will increase.
Commenting on the new research, the Association of British Insurers said:
"The average person will have about 11 different jobs over their lifetime, and move home eight times. The government predicts that there could be as many as 50m dormant and lost pensions by 2050."
Savers who suspect that they may have a lost pension pot can use the government's free online pension service via this link