Almost 48 per cent of UK adults with a pension say they ‘care’ about the charges they pay on their pensions, compared to 71 per cent who pay close attention to what they pay for a mortgage or current bank account, according to B&CE, provider of The People’s Pension.
According to a YouGov poll of 1,618 UK adults with a pension, nearly 18 per cent of those who say they don’t care about what charges they pay on their pension haven’t looked into or thought about what they’re paying, 16 per cent believe they don’t have enough saved for charges to make a difference, and 14 per cent believe charges won’t make a difference to their pension savings when they retire, despite there being charges.
Meanwhile, 14 per cent believe their pension companies’ prices are appropriate, 11 per cent believe pension charges are too hard to understand, and 10 per cent believe it is too difficult to find out what charges they pay.
The provider is urging all pension systems to publish their charges in pounds and pence on yearly statements today, in an effort to promote transparency.
The research findings coincide with the announcement of B&CE3, the provider of The People’s Pension, a leading automatic enrolment provider in the UK, that it has now rebated £20m to its members through its billing structure.
Low charges were also rated as one of the top three most significant features of a pension by 27 per cent of respondents.
The provider believes that the FCA and TPR’s Value For Money (VFM) Framework, which is presently being developed, should be incorporated on pension dashboards so that savers have transparent and comparable information before making a decision. The new VFM standards should also be extended to the retail sector and employer pensions, according to the report.
B&CE director of policy Phil Brown says: “This research is further evidence that the average saver doesn’t understand the impact that charges can have on their pension pot. At a time when people are naturally watching what they spend, it’s important that consumers are aware of what they are paying for their pension, which is potentially the most valuable asset many people own.
“Total transparency around charges is vital. We’ll be adding charges, in pounds and pence, on our members annual statements this year, and are calling on other providers to do the same.”