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‘Dig out old paperwork!’ Millions risk missing out on £13,000 retirement boost

With the pandemic set to remain a part of everyday life for at least some of the next year, savers across the country will be looking for the best ways to boost their savings as they prepare for a post-Covid future.

“According to the DWP, people switch jobs on average eleven times during their careers – which means a lot of different pensions to keep track of.

“It’s estimated there could be 1.6 million ‘lost’ pension pots in the UK, with each one being worth an average of £13,000 per pot. So it’s worth digging out your old paperwork.

“Your first port of call is finding any old paperwork that will tell you where your pension is and how to log-on to see its value and transfer it.

“If you can’t find any documents, you can use the Government’s pension tracking service to find where it is now.”

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“According to the DWP, people switch jobs on average 11 times during their careers – which means a lot of different pensions to keep track of.

She added: “Tracking down these old pots makes sense for a number of reasons.

“Firstly, knowing how much you have saved in total will help you work out how much you might need to save in the future to enjoy the retirement you want.

“Secondly, once you have located any old defined contribution funds you can consider combining them with your existing provider.

“This will make your pension easier to monitor and manage, but also means you could benefit from lower charges, greater investment choice and more flexibility when you decide to access your fund.

“Just double check before you transfer any old pensions whether they have any guarantees attached, as these could be lost if you switch to a new provider.”

On top of this, Ms Suter is encouraging people to use their ISA or pension to save any cash they have in light of upcoming changes to rates in 2022.

The pension expert said: “Income investors should also prepare their portfolios for the dividend tax increase, with rates rising by 1.25 percentage points from April next year.

“The move means that anyone taking home more than £2,000 a year in dividends, outside an ISA or pension, will now face a slightly higher bill.

“At £10,000 of dividends this equates to £100 a year more, regardless of your tax bracket, while at £20,000 a year it means an extra cost of £225.

“The tax breaks afforded by pensions and ISAs will become even more valuable if taxes rise and investors should look to maximise the savings they hold within these shelters, outside the clutches of the taxman.”

Currently, anyone in the UK can put up to £20,000 a year into an ISA. Usually people have a £40,000 annual limit when it comes to placing cash into one of their pension schemes.

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