People saving into personal pensions are being hit by charges of over 2 per cent in their first year of investing, research reveals.
Analysis conducted by ComPeer and commissioned by Nutmeg shows schemes run by wealth managers can charge up to £2,220 on a £100,000 pot over the first year of investing.
Investec Weath & Investment charges a £1,800 management fee, £280 in UK equities commission fees and £140 in commission on funds, totaling £2,220.
Killik & Co discretionary customers also pay £2,220 in fees over the first year of investing, while Charles Stanley Alpha Sipp investors will pay £1,290, according to the study.
Execution-only stockbrokers charge far less for personal pensions, ranging from £488 for Barclays Stockbrokers to £276 for Interactive Investor.
Nutmeg says it only charges customers a £630 management fee.
The calculations are based on a £100,000 pot of which £60,000 is invested in equities and £40,000 in funds. Over the first year of investment, there are eight equity trades – £5,000 each – and four fund trades of £10,000 each. It is assumed the value of the pension is £105,000 before annual charges after 12 months.
In February, the direct-to-consumer online discretionary manager unveiled its personal pension product.
Nutmeg chief executive Nick Hungerford says: “Our research shows that certain pension providers are charging over the odds for their service, and this simply isn’t fair nor is it necessary. At Nutmeg, we charge just one single annual management fee for our personal pension and still provide an expertly managed investment service for all of our customers.
“The rest of the industry should now take steps to clean up their act and put the investor first, as it’s already hard enough to save for the future.”