DWP estimates that there is currently £400 million in unclaimed savings, with the pension freedoms sparking an increase in demand for a tracing service.
The new service provides trace results immediately. Individuals enter their former employers’ details into the online database and are provided with contact details for pension schemes they may have paid into.
The government recently announced that it will be capping early exit fees and working with industry to introduce a Pensions Dashboard.
It has also announced that it is extending the pension freedoms, allowing people to sell their existing annuities from April 2017.
Minister for Pensions, Baroness Ros Altmann said:
"People have had on average 11 jobs during their working life which can mean they have as many work place pensions to keep track of.
"The new DWP online Pension Tracing Service helps reunite people with their lost pensions, giving details of providers to help people track them down."
Tom McPhail, Head of Retirement Policy at Hargreaves Lansdown, commented:
“This is a welcome development; The Pension Tracing service will help people track down lost pension pots and can dovetail with the forthcoming development of the expanding Pension Wise service.
"The simplest and most effective way to avoid losing track of old pensions is to consolidate them as far as possible into one arrangement; this can be done by selecting one pension you prefer to work with and transferring old pensions into it.
"The government and pensions industry is also working on the Pension Dashboard, which will help investors view all their pension pots in one place.
"We would like to see the government go further and to modify the terms of auto-enrolment to allow employees to select the pension into which their employer pays their pension contributions. This would help to put the individual at the heart of the pension system.”
