How to Find Frozen Pensions
A “frozen” pension, more accurately known by the FCA term “dormant pension”, refers to any pension that you’ve stopped paying into, often (though not always) after moving on from a job where you had a workplace pension.
But what if you don’t have the paperwork or can’t even remember which providers you were with in the first place?
In this article we’ll look at some of the steps you can take to track them down, as well as what to do with those dormant pensions once they come to light, including:
The good news is it’s almost always possible to trace lost frozen pensions, especially with guidance from one of the pensions experts we work with.
How can I find my frozen pensions?
If you’re trying to trace an old workplace pension and have had no luck finding the relevant paperwork, your best bet is to get in touch with any former employers who may have set you up with one. The HR department at your old workplace should be best placed to help.
Once you’ve recovered these details it will be up to you to contact the provider, who will be able to fill you in on its current value, what funds you’re invested in and how to update your address if you’ve moved house since you set it up. Most will also provide online access if you didn’t have this already.
Finding a frozen pension when your ex-employer no longer exists
If you’re trying to find a dormant pension that was set up by a company that has since ceased trading, or if the lost pension was a personal pension set up by you without an employer’s involvement, all is not lost.
You can use the government’s pension tracing service to track it down with just a few basic details.
Using the pension tracing service
This free online service allows you to search using company names (existing or closed), scheme names and other identifiers, and it can be a useful way to search your full pension history.
If you’re still drawing a blank, one of the pensions advisors we work with can also conduct a more in-depth frozen pension search on your behalf.
Finally, if you can’t remember the provider or scheme and don’t have any relevant paperwork, it might be worth looking back at your bank details. This can be particularly helpful if you are tracing a personal pension, as you’ll usually have paid into it through your own bank account.
Contact your bank if your records don’t go back far enough.
How do I find out if I have a frozen pension?
While it may seem unlikely that you wouldn’t know whether you have any dormant pensions lurking in your past, plenty of people do forget about the plans they had set up at some point in the past, only to move on to another and lose sight of the earlier one.
If you’ve had a lot of career moves, this scenario is fairly common.
In this situation, we recommend you follow the same steps mentioned above. Look through old paperwork and bank records, contact any employers you suspect might have set up a pension in your name, check the government pension tracing service and speak to a pensions expert for the best advice.
How much is my frozen pension worth?
This will depend entirely on how much was paid into the plan while it was active, the funds it was invested in, and on the type of scheme. However, there are a few points to bear in mind.
Will my frozen pension continue to grow?
A dormant pension will continue to behave like an active one in so far as its value can still go up or down depending on market conditions and other factors.
But with no contributions being made over a number of years, any growth is likely to have been significantly curtailed, and don’t forget that fees and poor investments could also have eroded your pension pot.
What fees can be charged on a dormant pension?
Depending on the type of scheme you took out, there are several fees to be aware of that can continue to rack up while a pension is inactive.
For example, some plans incur an annual fee regardless of activity status, while others may charge an ‘inactivity fee’ after a certain length of time.
There are also likely to be exit fees when you transfer or withdraw money from a frozen pension, and all of them can affect what your pension is worth.
Why is tracking down a frozen pension important?
Tracking a frozen pension is nobody’s idea of fun and you might wonder if it’s worth going to the effort of unearthing lost pensions years before you retire, especially if you have multiple accounts that you suspect are not worth much anyway.
However, there are some significant reasons why you should consider doing it as soon as you can.
Avoiding frozen pension fees
An old frozen pension could already be racking up fees behind the scenes (see above) so it’s best to know if this is the case and to take action now to avoid incurring further fees.
Tracking your pension’s performance
Without having sight of a pension, you won’t know how well it’s been performing. It could be that the funds you invested in years or decades ago looked great at the time, but now they could actually be losing you money.
This is where one of the pensions experts we work with can be particularly helpful, as they can guide you towards more lucrative funds.
Unlocking new features
Pension products have become far more flexible in recent years, with the introduction of new features you might not want to miss out on.
While older style pensions required you to purchase an annuity, the new ones give you much greater control over your pension savings, so you may want to look into switching it to a newer product.
I found my frozen pensions, what next?
Once you’ve located all your dormant pensions you have several options, depending on your current age and the types of pensions you’ve accumulated. A few of these are as follows:
Transfer the balance to your current pension
This can be a sensible option if you have lots of old pensions to your name, as consolidating makes it easier to keep track, reduces the ‘admin’ of managing multiple accounts, and means you won’t have to pay fees to several providers.
Having your pension pot as a single source will also reduce costs and complexity once you come to cash it in.
Before you make the decision to consolidate your pensions, you’ll also need to be confident that you aren’t losing any benefits that are specific to your old pension scheme(s) such as final salary guarantee, life cover or certain other special benefits that cannot be transferred.
It’s always worth speaking to a qualified pensions expert for the best advice.
Create a new personal pension
You also have the option of starting an entirely new personal pension that is not associated with any workplace and transferring your (combined) frozen pensions into it. The risks and benefits are the same as those listed above, except you are entirely free to choose the provider and scheme as opposed to sticking with an old workplace plan.
Can I cash in a frozen pension?
An annuity turns your frozen plans into a regular income stream, whereas drawdown allows you to withdraw as much or as little as you like, while the remaining balance of your pension pot stays invested and can therefore continue to grow.
Don’t forget, you can take up to 25% of the balance cash free, but the rest will be taxable so you may want to reinvest the remaining 75% if possible.
Get expert advice on frozen pensions
If you’re exploring the options for your dormant pensions and would benefit from speaking to an expert, the advisors we work with are ideally placed to help you navigate the pensions landscape and find the best solution for you.
Call us now on 0808 189 0463 or contact us online and we’ll be in touch shortly to discuss your requirements. We don’t charge a fee and there’s no obligation..