Warning as £2billion lost from UK pension pots - see if you're covered

Latest FSCS figures show the extent of the problem facing workers across the UK planning for retirement

The financial watchdog has received more than 43,000 claims for lost pensions totalling almost £2billion since 2019, new analysis shows.

If your pension scheme provider goes bust, the Financial Services Compensation Scheme (FSCS) may be able to pay compensation. It all depends on type of pension product you have and when your pension provider collapsed. For pensions that are provided by UK-regulated insurers, and that qualify as “contracts of long-term insurance”, the FSCS may pay compensation up to 100% of the current value of your pension pot with no upper limit.

If your pension provider was a self-invested personal pension (SIPP) operator, or a firm gave you bad advice, the cover the FSCS can provide falls to £85,000. If your employer, or former employer, goes bust and you’re a member of a final salary (defined benefit) scheme, then you may be covered by Pension Protection Fund (PPF).

The new analysis released by the FSCS shows most claims for pension losses have come from men over the age of 45. A staggering 77% of the claims have been made by men, with 95% of all claimants aged between 45 and 75. The data relates to eligible claims received by the FSCS between January 2019 to the end of December 2024.

To raise awareness with those most at risk, the FSCS has partnered with television presenter and football broadcaster Jeff Stelling. Jeff said: “The impact of losing retirement savings can be devastating. While they vary for each individual, negative outcomes can include a much lower than expected quality of life, with some forced to sell their homes, stay in work for longer than planned, or scale back their retirement plans.

“People think it will never happen to them, but that complacency could cost you your retirement. I’ve seen it happen to footballers on thousands of pounds a day and FSCS sees it happening to hard-working people all the time; savers left with nothing because they’ve taken poor advice or haven’t stayed on top of their savings. Regardless of your income or lifestyle, your retirement dreams can be left in tatters.

“It has never been more important that you take time to check your money – and your future – is protected and one simple step that everyone can do today is to make sure that their pensions are FSCS protected, because you may rely on it one day.”

Martyn Beauchamp, Interim Chief Executive at FSCS, said: “The financial loss to people’s pensions that we see in our claims is substantial and has serious consequences for thousands of people every year. FSCS has long highlighted the importance of checking that your pension savings are protected, as these types of claims often come to us long after the financial harm may have occurred – and by that point it can often be too late to rebuild before retirement.

“At FSCS we‘re committed to helping educate consumers, so they feel confident and informed when tackling important financial decisions, such as those faced when approaching retirement. Our free pension protection checker is just one of the tools that FSCS offers to help people feel confident about their money, and we encourage everyone to visit the FSCS website and check that their retirement savings are protected.”