The number of unclaimed pensions is increasing, meaning that more people are not receiving what is rightfully theirs.
Recent statistics illustrate that the average unclaimed pension sits at a staggering £28,000 per person.
As a business owner, it is crucial to aid your employees in securing what is rightfully theirs.
The Pension Tracing Service reports that the cumulative sum of unclaimed pensions runs into the millions, a figure that could substantially affect your employees’ financial well-being in their retirement years.
Equipping your staff with insight
One way you could help your employees is by launching a campaign to educate your staff about the issue of unclaimed pensions and the processes involved in locating them.
You should also encourage proactive measures to unearth any pensions they have left unclaimed.
Guidance in tracing pensions
Another way you can support this is by facilitating your team’s journey in tracing pensions by endorsing the use of the Pension Tracing Service, a no-cost service designed to assist individuals in retrieving lost pension schemes.
You could further this initiative by dedicating suitable resources and promoting awareness of this service in the workplace.
Cultivating a supportive atmosphere
You can also create a nurturing workspace where pension-related discussions are welcomed amongst your staff.
Urge your personnel to share experiences and tips on locating their unclaimed pensions.
Promote regular updates
Encourage your team to consistently update their details with their pension providers, incorporating changes to their address, marital status, and other personal particulars.
By instilling this practice, it will foster smooth communication with pension providers, reducing the chances of unclaimed pensions going forward.
Latest developments in pension policies
HM Revenue & Customs (HMRC) has announced that from the 2024/25 financial year, individuals earning below £12,570 who don’t receive tax relief will obtain taxable pension contributions directly from the HMRC at the financial year’s conclusion.
Effective 6 April 2023, the annual allocation for pension contributions increased to £60,000, accompanied by the abolition of the lifetime allowance.
The maximum amount for pension lump sums is now restricted to £268,275.
Those with protection against previous lifetime allowance reductions can retain their protected lump sum, with excess amounts subjected to taxation at the marginal rate rather than the 55 per cent rate.
These changes encompass all pension allowances, including personal pension plans like SIPPs, not just corporate pension schemes.
As a business leader, assisting your workforce in finding their unclaimed pensions not only promotes financial stability but also builds a foundation of trust and responsibility within your enterprise.
Launch this initiative today and support your staff in reclaiming the pensions they rightfully deserve.
If you would like advice about pensions, please contact us today.
