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Less than half of savers care about pension charges

Less than half of savers care about pension charges
Credit: FT Money

Mortgage and bank account charges draw the attention of a higher proportion of savers than pension costs, according to research.

Only 48 per cent of UK savers care about the charges they pay on their pensions, according to B&CE. 

The provider of The People’s Pension master trust pledged to add charges, “in pounds and pence”, to its members’ annual statements this year.

This apathy among savers compares with the 71 per cent of those surveyed who pay close attention to what they pay for a mortgage, and the 70 per cent who keep an eye on the costs of their current bank accounts.

The research, based on a YouGov poll of 1,618 UK adults, found that of those who are not interested in their pension costs, 18 per cent “haven’t got round to looking into or thinking about what they are paying”. 

Meanwhile, 16 per cent believe that they have not saved enough for charges to make a difference, while 14 per cent do not believe charges will make a difference to their pension savings when they retire.

“This research is further evidence that the average saver doesn’t understand the impact that charges can have on their pension pot,” said Phil Brown, director of policy at B&CE. 

“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.”

In May, the Work and Pensions Committee asked employers and trade unions for input on helping savers plan for their retirements as part of its inquiry on “saving for later life”. 

The inquiry, which is the final part of the committee’s probe into pension freedoms, will consider auto-enrolment, retirement income targets, and guidance and advice.

LCP, meanwhile, recently revealed that only two-thirds of master trusts will deliver “moderate” outcomes for retirees, unearthing a 600 basis point difference between the returns generated by the top and bottom-performing master trust providers.

 Alex Janiaud is deputy editor at Pensions Expert, FTAdviser's sister publication