Fewer than half of UK adults with a pension (48%) say they ‘care’ about the charges they pay on their pensions, compared to seven in 10 who pay close attention to what they pay for a mortgage (71%) or current bank account (70%), latest research from B&CE, provider of The People’s Pension1 has revealed.
A YouGov poll of 1,618 UK adults2 with a pension found that, of those who say they don’t care about what charges they pay on their pension, almost one in five (18%) haven’t got round to looking into or thinking about what they are paying, 16% think they don’t have enough currently saved for charges to make a difference and 14% say they don’t believe charges will make a difference to their pension savings when they come to retire, despite there being clear evidence that higher charges can negatively impact somebody’s retirement savings over the long term.
Meanwhile, a further 14 per cent say they trust that their pension companies’ charges are reasonable, just over one in 10 say that pension charges are too complex to understand (11%) and 10 per cent that it’s too difficult to find out what charges they pay.
Today, in a bid to improve transparency, the provider is calling for all pension schemes to include their charges in pounds and pence on annual statements.
The findings of research come as B&CE3, provider of The People’s Pension, a leading automatic enrolment provider in the UK, announces that it has now given £20 million back to its members in rebates through its charging structure4.
Phil Brown, director of policy at B&CE, said:
“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.”
The survey also found that low charges were important to more than a quarter of respondents (27%) when it came to one of the top three the most important feature of a pension, with only the rate of return on their money invested (36%) and being run by a well-known/trusted company (34%) being considered more important.
The provider believes that the Value For Money (VFM) Framework, currently in development by the FCA and TPR, should be included on pension dashboards to ensure savers have transparent and comparable information before making a decision. It is also calling for the new VFM regulations to be applied to the retail market as well as workplace pensions.
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- The People’s Pension is a leading workplace pension scheme from B&CE, serving more than five million pension savers across the UK, with more £17 billion assets under management. With no shareholders, it uses its profits to help people build financial foundations for life.
- All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2104 adults. Fieldwork was undertaken between 7th – 10th January 2022. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
- B&CE is a not-for-profit organisation that offers workplace pensions, employee accident cover and employee life cover.
- For a full breakdown of our charging structure visit: https://thepeoplespension.co.uk/member-annual-management-charge/