3.6million people have lost track of their pension savings because they changed jobs

More than 3.6 million of us have lost track of our pensions, harming our retirements, according to new research.

The problem is that more and more of us have several, small pension pots as we move jobs, according to insurance firm Scottish Widows.

This is because almost all employers have had to set up a pension for their staff since 2012, under a system called auto-enrolment.

It was meant to encourage Brits to save into a pension, but the average person has 11 jobs in their lifetime – meaning 11 different private pensions.

That means it is easy to lose track of a pension pot – or several.

Scottish Widows said the number of workers with small pension pots of under £1,000 has surged dramatically in recent years.

The Pensions Policy Institute (PPI) predicts the number of small pots will triple by 2035, to 27million.

One solution will be government software that lets you see all your pension pots in one place – called the Pension Dashboard.

But it is not due to go online until 2023, and it also won’t stop another problem – lots of annual charges.

Each pension pot charges yearly fees and charges, which can mount up if you have lots of smaller pensions.

Scottish Widows wants the government to change the current system to allow small pots to be automatically rolled together.

It said this will mean lower charges for the public, less red tape and more cash in retirement.

One in ten pension savers say they have no idea how to consolidate their retirement pots.

Another 12% say this sounds like such a headache that they’ll never do it.

Scottish Widows head of pensions policy Pete Glancy said: “This new research shows that people are warm to the idea of a government intervention that would act to promote their best interests.

“Undoubtedly, consolidating a savers’ pensions into one pot would bring them much closer to their money, increasing the sense of ownership and control.”

Another issue with auto-enrolment is that many of us are not saving enough to give us the money in retirement we’d hoped for.

Twenty-somethings saving for retirement have just over half the amount in their pension pots that ­people in their thirties do.

To keep pace, experts say they must up their contributions from an average of 8% to 12%.

It comes as predictions of long-term falls in stock markets mean pension funds are likely to deliver less in the future.

A typical worker who started saving eight per cent of their salary into a pension at the age of 22 would have a forecast pot of £85,000.

But someone who started work a decade earlier could look forward to having £131,000 when they retire.

How to track down and consolidate pension pots

There are many advantages to consolidating smaller pension pots. You may save money on fees, which range from nothing to 1% a year, and you will definitely find fewer pension pots easier to manage. But there are some possible issues with it too.

If you think you might have a lost pension, the first thing to do is find any paperwork you have on who runs your old pensions, or ask your current or old employers for this information.

Armed with that, you have a few options. You can transfer old pensions into your current workplace one.

Or you can move them to a different provider. If you are feeling hands-on you can swap your old pensions into a new one called a SIPP (self-invested personal pension) where you pick what your money is invested in.

Some companies offer a free service to help you consolidate your pensions online, such as PensionBee. All you’ll need are the names and ideally details of your old pension providers. If it looks like you shouldn’t transfer a pension, PensionBee will alert you before you do it.

On that note – there are some pitfalls to be aware of when consolidating pensions.

Firstly, if any of your pensions are defined benefit (DB), transferring these into a defined contribution (DC) pension is almost always a bad idea and means much less money for you in retirement.

That is because DB pensions are much more generous than DC ones in almost all cases.

Secondly, your pensions may have penalties if you transfer them, which will also eat into how much cash you retire with.

Finally, some older DC pensions have good perks, such as tax-free access to part of your retirement pot, or a guaranteed high annuity rate. This could be lost if you swap the cash to a different provider.

If you are in any doubt, a financial adviser can give you advice based on your own situation.