22% of people have lost track of their pensions

Aegon has recently found that 64% of people have more than one pension pot and, of that 64%, 22% have lost track of one or all of their pensions.

The figures published in the report means that over 700 million people have potentially misplaced some of their retirement savings, highlighting the challenge of a broader trend towards a career involving an average of 11 jobs and the difficulty of keeping tabs on workplace savings.

However, the recent survey discovered an improvement in pension awareness in the last two years, with nearly a 10% fall in the number of people not knowing the value of their pensions from 39% to 30%.

Aegon head of pensions Kate Smith said: “It’s very hard to plan for retirement without a full view of your savings and an understanding of what your state pension entitlement is likely to be.

“So it’s concerning that the number of people who have lost track of their pensions has increased slightly. Without the bigger picture people might be setting themselves up for a retirement fall without a clear idea of what their savings are worth. Nowadays the vast majority of jobs come with a pension and as people frequently change jobs it’s all too easy to lose track of your pensions, especially if they are small.”

In a bid to combat the challenge of losing track of multiple pension pots, Aegon has suggested that savers consolidate their savings with one provider. However, the research found that only 27% of people would be interested in this method.

The most common reason for not consolidating pension pots was because savers claimed they did not want “all their eggs in one basket”, representing 46% of respondents. A further 27% of people said that they were not aware of the benefits of moving all their pensions.

“Pension consolidation won’t be right for everyone, there are merits to not keeping all your eggs in one basket. And some older style pensions will have valuable benefits which may be lost on transfer. It’s notoriously difficult for people to keep track of small pension pots, particularly at the beginning of someone’s working life. Consolidation of small auto-enrolment pots along the way will help people keep track of these,” Smith added.

“Looking to the future, the launch of a pension dashboard in 2019 should simplify the process of finding lost pensions, and has the additional bonus of seeing all your pensions, including the State pension, in one place. The hope is that by making all their pensions more visible people will gradually become more interested in pensions, and in time start to make more active decisions to start to get them ready for retirement.”

Fraud within the personal finance sector

Traditionally, it has been viewed that criminals target the vulnerable and elderly. However, Royal London personal finance specialist Helen Morrissey notes that this view is “evolving quickly”, with recent scams showing that no one is safe.

“There are even reports of fraudsters exploiting the recent issues at TSB to send out emails asking people to set up new accounts from which they then target people’s savings. Other recent email scams include people receiving emails from HMRC saying the recipient is due a tax refund and needs to click on a link and input their details,” Morrissey added.

Emails, such as the ones described by Morrissey, often include the logo’s and headings of the firm that it is impersonating, meaning that consumers must be vigilant, taking the utmost care when opening emails or answering phone calls from fraudsters claiming to be from a legitimate source.

Morrissey warns consumers to “always bear in mind” that a bank would never send you an email asking for your PIN number or on-line banking details.

“They certainly won’t ask you to transfer funds from one bank account to another. It is always worth checking the sender’s email address to see if it is genuinely from the company they say they are from. You can do this by hovering the cursor over the email address rather than clicking it,” she said.

Referring back to Morrissey’s previous point in relation to people of all ages being targeted by fraudsters, not-for-profit organisation Cifas revealed that, in 2017, there was a 27 per cent increase in the number of 14-24 year olds being used a ‘money mules’. In particular, Cifas reported that “cash-strapped” students were being targeted by fraudsters, often promised large financial rewards for minimal amounts of work.

The National Fraud Database warns that criminals were targeting these younger people through social media platforms and messaging applications, such as Whatsapp.

“To avoid banks’ stringent identity fraud checks, criminals are increasingly turning to laundering their illicit funds through other people’s bank accounts, and probably giving them great compensation for doing so.

This trend has already increased 11% since 2016 and could easily continue to rise. More young people are being recruited in this manner, particularly among the student population, who are handing over their identities and banking credentials without understanding the implications.

Challenging the throwaway society and the rise of Socially Responsible Investing

After years of campaigning by NGOs, it took a seminal wildlife documentary – Blue Planet II – to get politicians to pay attention to the devastation being wrought by the disposal of plastics.

More than eight million tonnes of plastic are discarded into the oceans every year, equivalent to 16 full shopping bags for every metre of the world’s coastline.

Policy experiments have proven remarkably effective. The UK’s plastic bag charge cut usage by 85%1. We expect to see similar policy initiatives developed in 2018. Single-use plastic bottles are a likely target, given that a million plastic bottles are sold every minute, but only a small percentage of which are made from recycled materials.

There is a potential cost here for companies which have to change their production processes – but it also opens up opportunities for those developing innovative new packaging solutions.

‘More than eight million tonnes of plastic are discarded into the oceans every year, equivalent to 16 full shopping bags for every metre of the world’s coastline’.  But how much plastic is there really in the ocean?

The United Nations 17 Sustainable Development Goals (SDGs) which are a blueprint for a better world, cover issues from poverty, inequality, the environment, to education and public health, and the SDGs identify 169 targets to track progress towards the 2030 target date.

Responsibility for achieving progress was once seen very clearly as the duty of governments, perhaps with the help of charities and NGOs to fill the gaps.

But times have changed. We are shifting to a new paradigm where both companies, and investors in them, are expected to recognise that their actions have wider consequences on the economy and society, and to think deeply about how they can square their duties to deliver risk adjusted returns with the imperative to manage these consequences.

What does that mean in practice for investors? As well as further growth in the rapidly-expanding Socially Responsible investing industry, we also anticipate further momentum behind efforts to measure portfolio-wide sustainability impacts, as investors seek to demonstrate their understanding of their alignment with the SDGs.