Savers paying three times the average in pension charges

UK adults are paying three times more on average than they should for their pension which could cost savers £18,000 over 20 years and push retirements back by two years, new research from Profile Pensions has revealed.

The research revealed 55% of people are currently in an expensive pension – with a charge greater than 1% – while 31% are in pensions between 0.5% and 1%. Only 14% of adults were found to be in cheap pension plans with a charge less than 0.5%.

The Profile Pensions’ data also revealed one in 10 people to be in more expensive pensions with charges above 1.5%.

Consumer figures were taken from YouGov on behalf of Profile Pensions, and a total sample size of 2,096 adults were surveyed online last October.

Currently, the average annual provider charge on pensions is 1.09%, but Profile Pensions recommended that pensions with annual provider charges don’t exceed 0.34%.

Profile Pensions chief investment officer, Michelle Gribbin, explained: “Many aren’t aware that they even pay fees, let alone how much money they could be losing each year. Through our own research and data, we hope to raise awareness on the issue of pension charges and encourage people to take action to check their charges.

“Most people should be paying much less, ultimately costing themselves thousands of pounds over a number of years which could easily be avoided. Our data identifies a specific group of pension savers who’re particularly vulnerable to be paying very high fees, so it’s important these people act quickly to check if they’re being overcharged and take measures to reduce charges.”

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