Are you confident that you’re maintaining accurate member records in your pension scheme? Our free guide provides advice on steps to mitigate data degradation and trace gone away members.
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Deferred or lost members represent a huge challenge for pension providers. Recent estimates suggest that a fifth of savers~ have lost track of at least one of their pension pots and that the current value of unclaimed pension savings is up to £20bn*.
Data degradation is a real problem for pension providers: personal details for pension holders decay over time as they move house, change name (through marriage or divorce) or simply update their contact telephone or email. In many cases, people forget to notify their pension providers of these changes, particularly when retirement is some way off. In fact, our analysis shows that those most likely to lose contact with pension providers are aged between 30 and 40, when, on average a person will normally have at least one house move^.
The FCA is proposing that pension providers should issue ‘wake-up’ packs to their customers from the age of 50 and then every five years thereafter, until the pot is accessed. This proposal is to replace the previous guidance which specifies that pension wake up notifications should be issued only six months ahead of the chosen retirement date. The proposed change is set to cost pension providers millions in additional fees on processing and mailing costs, not to mention the inherent risk of confidential mail falling into the wrong hands.
These figures illustrate the sheer scale of the challenges that pension providers face when trying to reunite gone aways with their lost pensions, and the amount of money that the intended beneficiary, or their family, could be missing out on. This highlights the need for regular existence checks and deferred pension member tracing.
If you’re looking to re-establish contact with lost or gone away members, then please download our best practice guide to see how we can help.