The UK is sitting on a £20 billion “lost pension mountain”, according to estimates from an insurance industry body.
Some 1.6 million lost pension pots worth nearly £20 billion could remain unclaimed, with people often losing track of their savings due to job changes or moving house, the Association of British Insurers (ABI) said.
It described the scale of the lost pensions problem as “jaw-dropping”.
Research was carried out on behalf of the ABI by the Pensions Policy Institute (PPI).
The PPI surveyed firms representing about 50% of the private defined contribution (DC) pensions market.
From this, the PPI found 800,000 lost pensions worth an estimated £9.7 billion.
It estimates that, if scaled up to the whole market, there are collectively around 1.6 million pots worth £19.4 billion unclaimed - the equivalent of nearly £13,000 per pot.
The ABI said the overall lost pensions figure is likely to be even higher - as the research did not look into lost pensions held in the public sector, or with trust-based schemes typically run by employers.
It said providers make considerable efforts trying to reunite people with lost or forgotten pensions.
In 2017, more than 375,000 attempts were made to contact customers, leading to £1 billion in assets being reunited with them.
But, the ABI said that with people often moving around, a pensions dashboard which would enable people to see all their pensions in one place online is now more important than ever.
The pensions industry has been working on the development of a dashboard.
The average person will have around 11 different jobs over their lifetime, and move home eight times.
As more people take up pensions with the roll-out of automatic enrolment, it is estimated there could be as many as 50 million dormant and lost pensions by 2050.
Yvonne Braun, the ABI’s director of long-term savings and protection, said: “These findings highlight the jaw-dropping scale of the lost pensions problem. Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers.
“The industry has stepped up its efforts to re-connect savers with their lost nest eggs, developing a new framework launched earlier this year to help pension providers trace ‘gone-away’ customers more consistently.
“But industry efforts can only go so far - we need a radical digital solution to cope with the way society is changing, or the problem will get worse.
“It is important that the Government stands by its promises to take forward the pensions dashboard. This project has cross-party support, with the backing of consumer groups, and could mean a more secure retirement for millions of savers.”
People can use the Pension Tracing Service to track down lost pensions -www.gov.uk/find-pension-contact-details.
Helen Morrissey, a pensions specialist at Royal London said: “These figures are astonishing and confirm the need for the Government to move forward with the pensions dashboard as quickly as possible.
“Having a dashboard in place enables people to keep track of the pension savings they have built up with different providers and employers which helps them make more informed decisions about their retirement.”
A Department for Work and Pensions (DWP) spokesman said: “We are dedicated to ensuring that people have access to their pensions information and the opportunity to save throughout their lives.
“That is why we are committed to an industry-led pensions dashboard and have introduced automatic enrolment, helping nearly 10 million people into saving or saving more.
“Anyone who would like to track down lost savings can use the Government’s free Pension Tracing Service.”