The report from the Pensions Policy Institute, co-sponsored by the ABI, says that since 2018 there has been a 73% increase in the number of lost pension pots.

The number has grown from an estimated 1.6m to over 2.8m with an average £9,400 found in each pension pot.

The report has been timed to coincide with National Pensions Tracing Day being held on Sunday, 30 October.

The report warns that changing jobs and moving home are key factors in people losing track of their pensions.

Yvonne Braun, director of policy, long‑term savings and protection, at the ABI, said: “The amount of money in lost pension pots has increased by 37% to £26.6 billion in recent years, with people missing out on money that can make a real difference to their quality of  life in retirement." 

National Pension Tracing Day was launched by Punter Southall Aspire (PS Aspire) and is supported by many providers including Standard Life.  

Alan Morahan of PS Aspire said:  “We are pleased to have been able to co-sponsor this reprise of the research the PPI last carried out in 2018. 

“The findings support our rationale for founding National Pension Tracing  Day and show there is still much work to do to reunite people with lost pension savings. The introduction of Pensions Dashboards should assist with that and this research provides a benchmark from which to measure their success.”

John Upton, policy analyst at the PPI, said: “While the problem of lost pots had been expected to worsen over time, the second iteration of this survey has enabled the problem to be gauged more precisely. 

“There has been significant  growth in the value held by these pots, underlining the fact that this problem will continue to grow without intervention. One such intervention is Pensions Dashboards, about which the survey found cautious optimism among providers. Conducting this survey immediately before the launch of dashboards will allow us to evaluate their impact with further iterations of the survey.”  

According to an FOI request made by Hargreaves Lansdown, the Pension Tracing Service service has taken over 232,000 calls between April 2017 and August 2022.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “The number of lost pensions is growing at an alarming rate and risks undermining our retirement planning.

“The pandemic has acted as an accelerant to the trend, with more people shifting jobs and we now have an estimated £26.6bn in lost pension money in the system. The average amount in lost pensions is just over £9,400. This may not sound like a lot but over time investment growth can add up to a tidy sum and if you lose track of more than one pension, it can have a major impact on retirement planning decisions.”

Tom Selby, head of retirement policy at AJ Bell, said: “The success of automatic enrolment in getting millions of people saving something for retirement, many for the first time, has exacerbated the problem of ‘lost’ pension pots.

“The combination of people switching jobs regularly – around 11 times over the course of a lifetime according to some estimates – and auto-enrolment is creating a vast and hugely valuable sea of retirement money that has become disconnected from its owners.