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I worked for a company from around 2013 to 2015 and had a pension with around £8,000 in the pot.

I left the company when my father died and went home to look after my mother. I would point out I had the same email address from 2009 to the current date.

When Covid hit I had some time to chase up pensions and asked my former employer for nearly a year where my contributions were.

I received an email which in effect said I have lost the pension

I didn’t know you could lose a pension and haven’t with all my other providers, some going back 30 years, so I am confused as to why this is allowed to happen and would be grateful for any advice you can give.

Old job: Email from my former employer's scheme administrator in effect said I have lost the pension

Steve Webb replies: These days, when you build up a ‘pot of money’ pension through your workplace and then change job, that money is safe.

The money goes on being invested on your behalf, and you can either draw it when you reach pension age or transfer to another scheme if you wish.

But you have fallen foul of a rule which affected those who were members of a scheme before October 2015.

This was a process known as a ‘short service refund’ and applied in cases where someone served less than two full years as a member of the scheme.

Under these provisions, your scheme was allowed to close the pension, refunding you any contributions that you made and returning the rest back to the employer.

I have contacted the administrator of your scheme and it has explained what happened.

After you left the company, the pension scheme wrote to you and explained that you had the option to transfer your pension pot somewhere else, giving you three months to reply.

But if you did not do so, it would apply a ‘short service refund’.

You did not reply to this initial letter, so it sent a follow-up roughly five months later.

You did not reply to this letter either, so it wrote a third time to say that the pension had been closed.

In this case you might have expected at least to get your employee contributions returned.

But the administrator has told me that your employer operated a ‘salary sacrifice’ arrangement. This means that you took a reduced rate of pay and, in return for this, 100 per cent of the contributions were made by your employer.

As a result – unfortunately – this means there was nothing to return to you.

The whole situation is very regrettable.

You have told me that you moved house not long after you left the company. Given everything else that was going on in your life, it’s not surprising that you didn’t immediately rush to give the pension scheme your new postal address.

But from the administrator’s point of view, it has done everything correctly.

It wrote to you at the address that it held for you and got no reply.

I have checked and the administrator says it didn’t get any ‘return to sender’ or ‘addressee gone away’ message which might have led it to think the address was no longer valid.

It then gave you a decent length of time to reply, and also sent you a follow-up letter, but again with no response.

You mention that in 2020 you did notify the scheme of your change of address, but by this time the pension had been closed and the employer contributions refunded.

You have queried why the scheme did not try to contact you by email.

In general, schemes may be reluctant to use email for important correspondence, partly because messages may contain sensitive personal information and email is not secure.

In addition, it will generally have far better coverage of postal addresses than email addresses, so this will be the preferred means of communication.

But I do agree that it is a shame that, having had no reply to letters, it did not send you a message by email to check that you had received them.

A spokesman for XPS Group, which administered your pension, said: 'As an administrator, we always want to support in helping individuals recover the benefits that they have saved for and are entitled to, in accordance with rules as set by the scheme trustees.

'In this instance, the scheme was administered in accordance with the legislation and scheme rules in force.

'We are sorry that your reader was unable to comply with these rules at the time, which is why their entitlement to transfer her benefits came to an end.

'We do recognise however, that when your reader contacted us in 2020 to notify us of a change of address, we should have made clear that no benefits remained in the scheme, and we regret that this was not communicated at the time.'

As I say, it is obviously very regrettable that the £8,000 or so that had built up in your pension pot during your period with this employer has now gone.

The 2015 change means that this should not happen in future, but those were the rules at the time where someone did not transfer out their benefits.

Your unfortunate experiences are a reminder to all of us of the need to make sure that any pension scheme of which we are a member has up-to-date contact details for us. This should help to ensure that vital communications reach us in good time.

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