Pension Tracing

Pension Tracing

David Stirling is back to explain the process of tracing your pensions.

How do I access my pension and track my pension claim? What information do I need to track unclaimed pensions?

Pension tracing is free of charge, via the government website – so you don’t need to go to one of those advertised services. On the government website you will need your name, date of birth, National Insurance number and your previous or current employer’s details.

Your national insurance number should allow you to track down any previous pensions that you’ve had.

How many years do you need to contribute to get a full pension?

For the full state pension, you usually need 35 years of National Insurance contributions. You’ll still get something if you have at least ten qualifying years – it’s pro rata based on how much National Insurance you’ve contributed over the years.

What is a pension review and is it necessary for all pensions?

This is debatable. It’s not necessary for all pensions, but it’s good to keep an eye on these things to make sure they’re on track.

In a pension review we’d be looking at things like the performance and the risk or volatility of the funds. These can be misaligned to your priorities or your goals, in which case we would look at different funds to move you into.

A pension review is quite a healthy thing. You’re looking at the progress of what you’ve invested in and whether it’s going to match up with what you wanted to do, at the end of the day.

Some pensions have guarantees, and there are final salary schemes. They tend to be slightly more complex, but they’re always worth looking at, I think.

Can I lose my pension in the UK? How do I find my old and lost pensions?

The money in your pension should be protected by the Financial Services Compensation Scheme or the Pension Protection Fund. So unless you’ve transferred it into some sort of unregulated scheme, you’d be very unlikely to lose it.

It’ll be in the UK somewhere and pension tracing services should be able to find it for you. You can either search for these yourself through the government website or use an advisor to send away for the information.

We would send a letter of authority away to previous providers and they’ll give us all the up-to-date information. We can then review your current situation. Again, we look at the performance, the fees and the risk being taken by the pension and if it will match up with what you’re currently looking for.

Can you help find a pension that’s been lost when moving between jobs?

We work with people who often have various paid up pensions. They’ve worked for somebody for 10 years and have £30,000 there, they work for somebody else for another 10 years with another £20,000 pension. That’s the sort of thing we would look at for them, and potentially just merge that into one pension fund that matches their priorities.

When a pension recipient dies, what happens to their pension fund?

A number of things can happen on this. It depends on what sort of age they are and whether they’ve started taking the pension.

You don’t lose your pension. If you have a beneficiary like a spouse or children, you can make them nominees. They would then benefit from either the income if you were taking it, or death benefit from it. It doesn’t disappear.

A lot of these pensions are now intergenerational, as well. For instance, with a commercial SIPP you can pass it down to your children. You can have a commercial property in a pension and that passes down without inheritance tax. The beneficiaries have options – they can continue to take income from the investment, or sell it.

They would really need to speak to an advisor because there are various options. Do you want to keep it on, intergenerationally? Do you need the funds out of it? Do you need to take the income from it? There are so many outcomes that it would be hard to give you a single bit of advice on that.

How can a financial advisor help with pension tracing?

We can help you trace pensions, and also if you’re self-employed and you want to set up a pension, we would look at your circumstances and assess your attitude to risk. That would look at your appetite for volatility and help us match up funds.

We would look at performance. We’ve always tried to find something that outperforms the markets, with a decent fee structure. There’s plenty of stuff for us to talk about, and our initial advice is free.

It’s always good to get letters of authority, explore people’s information, sit down with them and just work out a plan for them.

The value of pensions & investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Tax treatment varies according to individual circumstances and is subject to change.