One in five consumers with multiple pensions has lost track of at least one of them, according to research from wealth management group Tilney.
This is usually through changing their address, phone number, email address or legal name.
Having had no contact with their pension providers for some time, savers inevitably forget where their money is, and with incorrect details on file, the providers may be unable to locate them.
The UK’s Department for Work and Pensions (DWP) launched a pension tracing website in May 2016 to help savers track down lost or forgotten retirement pots, but this has to be done by the saver.
With the FCA’s recent proposals for pension providers to send retirement ‘wake-up’ packs to consumers at the age of 50, there is a possibility that without the right data on file, many customers may find they do not receive these reminders for all their possible pension pots.
According to LexisNexis Risk Solutions data, this is only going to be a growing issue.
In the next 10 years, there will be 9.8 million UK consumers turning 50 – and this figure is going to be more like 12 million in the next 20 years.
Unless pension providers take action to reconnect with clients, the number of savers becoming disconnected from their pension pots will also grow.
Steps providers can take
To help aid the issue, LexisNexis has four key steps for providers to help re-establish contact with lost savers:
Identity verification – when a new scheme member is entered onto a provider’s system, identity verification software should be used to check the individual’s identity against authoritative sources, eg the electoral roll.
Database monitoring – continuous monitoring of a provider’s database is key to highlight any changes in members’ circumstances, such as house moves, name changes and mortality screening.
Batch tracing – advanced linking technology can help to trace high volumes of gone away customers to their relevant forwarding addresses, with very little effort required. For customers which are harder to find, a specialist manual researcher is required.
Confirming identity – once a customer has been traced to eg a new address, correspondence can be sent to request the member confirms their identity and contact details.
Steve Arnison, commercial director at LexisNexis Risk Solutions says: “For pension providers, forgotten or misplaced pension posts are a huge issue – not just for customer service, but from a regulatory standpoint too.
“In a perfect world, all savers would notify their pension providers if their address, name or situation changed, but in reality, the burden of responsibility lies with the providers. To stem the growth of this issue, firms need to invest in the technologies that can cleanse and match data efficiently to successfully reconnect with lost customers.”