Pension savers face “losing thousands of pounds” from their retirement savings due to forgotten about charges, according to new research.
A survey conducted by the People’s Partnership warned that pensioners could be significantly worse-off after being hit with charges when transferring funds.
More than seven in 10 people who had recently transferred their pension did not know the exact fees for their old pension, or their new charges.
The pension provider is calling for greater transparency from the industry when it comes to these charges as people “risk losing thousands” in retirement savings.
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Pension savers are ‘losing thousands of pounds’ to charges
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According to the People’s Partnership, this will allow savers to understand key information when moving money from their pension.
Seemingly small differences in percentage charges could add up to significant amounts in cash terms over the years that money is invested, the pension provider warned.
This warning comes as the cost of a “comfortable retirement” in the UK has risen substantially in the past year.
Furthermore, ongoing concerns about the affordability triple lock have resulted in calls to raise the state pension age to 71 by 2050.
Older households have struggled to cope amid the ongoing cost of living crisis between soaring energy bills and inflation-hiked prices for goods and services.
Patrick Heath-Lay, the chief executive officer at People’s Partnership, urged the pension industry to be more transparent over charges which could worsen the living standards of older households.
He explained: “While there are many factors that can make a pension attractive, the two fundamental aspects are investment returns and charges.”
“If people can’t make an informed decision about the value they are being offered by different providers, they risk losing thousands of pounds from their retirement pots.
A pension provider is calling for greater transparency from the industry about said charges
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“This lack of transparency is an enormous issue that pensions providers have to address.”
People’s Partnership commissioned a survey of 1,000 retirement savers in November to December 2023.
Those polled had consolidated their defined contribution (DC) pensions without the help of a financial adviser in the previous two years.
Some 50 per cent of respondents shared that they thought it was easy to find information on fees and charges from new and previous pension providers.