The research was carried out by the Pensions Policy Institute (PPI) which surveyed firms representing about 50% of the private defined contribution pensions market. From this the PPI found 800,000 lost pensions worth an estimated £9.7bn. It estimates that, if scaled up to the whole market, there are collectively around 1.6m pots worth £19.4bn unclaimed - the equivalent of nearly £13,000 per pot.

ABI says this 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.

Insurance industry figures show that in 2017 more than 375,000 attempts were made to contact customers, leading to £1bn in assets being reunited with them, but the ABI warns the scale of the challenge is likely to increase.

Nearly two-thirds of UK savers have more than one pension and changing work patterns means that the number of people with multiple pensions will increase. People typically lose track of their pensions when changing jobs or moving home. Government predictions indicate that there could be as many as 50m dormant and lost pensions by 2050.

Dr Yvonne Braun, ABI’s director of long-term savings and protection, said:.

‘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.’

Report by Pat Sweet