The total value of ‘lost’ pension pots - pensions which have become ‘disconnected’ with their owners - increased by £4.5bn from £26.6bn to £31.1bn between 2022 and 2024, by the Pensions Policy Institute (PPI) has revealed in a new report.

PPI analysis found that that almost 3.3m pension pots are now considered ‘lost.’

The lost pensions contain an average of £9,470, rising to £13,620 among people aged 55 to 75.

The report coincides with the launch of National Pension Tracing Day this Sunday, 27 October.

The increase in ‘lost’ pensions is mainly due to people switching jobs, says the PPI. Auto enrolment is also a factor, the study found, as people moving jobs can lose track of auto-enrolment plans. Some 11m people now have an auto-enrolment plan.

AJ Bell says the planned Pensions Dashboards, recently backed by the new Labour administration, should help more people keep track of all their pensions.

Rachel Vahey, head of public policy at AJ Bell, said losing track of pensions would hit people in the pocket in retirement and more needed to be done to keep people connected with their pensions.

She said: “Automatic enrolment is often held to be one of the most successful public policies of our time. It is credited with enrolling over 11 million people into a workplace pension since 2012, creating many new pension savers.

"But with people switching jobs regularly – around 11 times over the course of a lifetime according to some estimates – it’s easy to see how some people end up losing track of the pension pots they have built up.

“Lost pension wealth has now hit a staggering £31.1 billion, according to the Pensions Policy Institute (PPI). This means millions of people could be in danger of facing an incomplete picture when it comes to their long-term Financial Planning, potentially missing out on thousands of pounds of disconnected pension money.”