UK faces over £31 bn in forgotten pensions and benefits, experts urge automatic payouts

Financial experts warn that Britain has roughly £30 billion locked in forgotten workplace pensions, with the average unclaimed pot around £9,500. The issue was highlighted on The Martin Lewis Money Show, where a Berkshire retiree discovered a £45,000 pension she had never claimed. Lost pensions often stem from job changes, address or name updates, and pension‑scheme mergers, leaving providers unable to contact former members.

Separately, the government estimates that about £2.5 billion in pension‑credit entitlements and £1.1 billion in housing‑benefit payments for pensioners go unclaimed each year. Industry leaders propose shifting from a “pull” system, where retirees must apply, to a “push” model that automatically assesses eligibility using data held by HMRC, local authorities and the DWP. The Danish approach, which uses integrated national registers to calculate support automatically, is cited as a model.

Both reports call for better use of existing data and automatic mechanisms to reduce pensioner poverty, simplify claims and ensure that billions of pounds of entitlement reach those who need it.