Data published by investment adviser Moneyfarm has suggested that 50% of pension savers are unaware they are paying charges on their pension pots.
According to Moneyfarm, costs subtracted from an investment throughout its life ‘play an enormous part in the final retirement pot’. The data showed that pension savers are, on average, paying annual charges of 2.5%. 53% of individuals believe their fees are competitive.
Just 23% have considered shopping around in order to benefit from lower costs.
Commenting on the matter, Carina Chambers, Pensions Technical Expert at Moneyfarm, said: ‘A seemingly small amount in fees can lead to significant shortfalls over the long term.
‘The difference between 2.5% and 1% doesn’t seem much, but when it comes to pensions, we are talking about a large amount of money which is invested over a long period of time. That apparently small percentage difference therefore compounds, so the losses we are talking about can be very significant.’
04/07/2024
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