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Majority unaware of pension charges

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More than half of working age people have no idea whether or not they are being charged by their pension provider, new research suggests.

A YouGov poll of 1,256 working adults aged 65 and under, commissioned by automatic enrolment provider The People’s Pension, found 51 per cent do not know if their existing provider levies any charges for managing their pension pot.

Lack of awareness is highest among women, with 63 per cent unaware of whether they were being charged.

Just over a fifth of respondents (21 per cent) knew they were being charged but didn’t know how much, with only 11 per cent able to say how much they were being charged.

The People’s Pension director of policy and market engagement Darren Philp says the research demonstrates “a worrying lack of awareness about pension scheme charges”.

He adds: “At the present time schemes can charge in very different ways which makes comparison difficult and means consumers could be being ripped off.

“We want to see standardisation of charges so people can truly compare what a pension costs them. Providers should compete on what they charge and the service they provide, not how they charge. The current system does not serve consumers well.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The very fact that 51% of those questioned don’t even know if their existing provider levies any charges for managing their pension plan surely tells us a great deal. Do these people really think that the companies administering them and managing the funds within them are charitably funded institutions, levying no charges at all on plan holders?

    If so, then George Osborne’s blithe assumption that everyone and anyone can be trusted to act responsibly when given the freedom to cash in their pension plan is about 500 miles wide of the mark. Then again, maybe the new unfettered access provisions really are just a cynical manoeuvre to encourage people to act in (quite possibly un-advised) haste and pay huge amounts of tax to HMRC to help pay down the deficit.

  2. Problem is that cheapest is not the best.

    Cheapest could also mean poor performing.

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