This month, our Chartered Financial Planner Jan Kinghorn met up with Mark and Sally who wanted to see if we could help them assist with finding some lost pensions.
Research by the Association of British Insurers (ABI) conducted in 2018 found there were approximately 800,000 lost pensions in the UK which amounted to approximately £9.7 Billion. This is something we frequently come across at our office in Worthing, so when Jan met up with Mark and Sally, who had lost track of some of their historic work and private pension schemes; we felt that we would be able to help.
Their current situation
Mark and Sally are both 66 and are in receipt of their state pensions. Mark visited his accountant to submit his paperwork for his last tax years income tax submission, and he happened to mention to his accountant about some old pensions he had lost track of. The accountant suggested Mark get in touch with Investment Solutions to see if we could help.
Mark and Sally work in a sheltered housing complex and he was concerned that when he eventually retires, he will not be able to afford to live – as Mark and Sally currently have accommodation provided for them but at retirement they will need to begin paying for rent for a new place. They made an appointment to meet Jan at our office in Worthing and brought in their old pension statements dating back to the 1980’s and 1990’s. Mark had also moved home several times and had lost track of where the money was currently held (as he had not updated his address with the scheme providers).
Tracking down the pensions
Jan offered to see if she could track down the pension providers and provide a report on what type of pension benefits Mark and Sally had, including details of how much income the schemes could provide them with – both now and at retirement.
Jan obtained letters of authorities from Mark and investigated where the schemes currently were using the ‘Department of Works and Pensions’ latest pension tracing service. This is a helpful free service which can help point you in the right direction if you have lost details of your pension benefits. Once Jan located the contracts, Jan requested detailed information on the current value and benefits of each particular scheme.
What did we discover?
The information Jan found out was great news for Mark and Sally. The schemes held more money in them than they realised. Mark was able to take a large lump sum which has allowed him to pay off some debts and book an extra special holiday once he retires. One of the schemes had a Guaranteed Annuity Rate of around 10%; which means it will provide a much more generous income than a modern annuity can provide. There were also generous spouse’s benefits which pleased both Mark and Sally – as they were worried what would happen in the event of Mark passing before Sally.
It was important to Mark to receive a fixed income in retirement and so the schemes enabled him to receive a tax-free lump sum and a set income for the rest of his life at a higher rate than he could have previously imagined.
We were very pleased with the outcome, and we wish Mark and Sally a wonderful retirement.
If you would like us to assist you with tracing and/or better understanding your historic pension arrangements, please do get in touch at 01903 214640.