Carina Chambers, Pensions Technical Expert at Moneyfarm, comments on the number of savers that are unaware they are paying annual fees on their pension schemes.

New research from digital wealth manager, Moneyfarm, has revealed that one in two Brits (50 percent) are not aware that they are paying annual fees on their pension schemes.

And even those who are aware, half (50 percent) admit they actually have no idea what the amount they are paying in fees is, and 73 percent are not sure how they would go about finding out.

Carina Chambers, Pensions Technical Expert at Moneyfarm:

We would consider annual pension fees of around 1% to be a reasonable amount.

A seemingly small amount in fees can lead to significant shortfalls over the long term. The difference between 2.5% and 1% doesn’t seem much, but when it comes to pensions, we are talking about a large amount of money which is invested over a long period of time. That apparently small percentage difference therefore compounds, so the losses we are talking about can be very significant...

Frustratingly, these charges are often hidden in the small print or in footnotes of the contract. For that reason, you may be paying fees that you are unaware of which could be reducing the size of your pension pot.

We hear anecdotally, and it is backed up by this survey, that people find it hard to understand what charges they are paying on a pension scheme – even when they have the statement in front of them. They can be very hidden. It may be easier to think ‘why bother finding out’, but you really shouldn’t put your head in the sand.

Our caution is that whilst charges can sound miniscule, over time it could make a massive difference – a difference to the tune of tens of thousands of pounds – to your final pension pot, so shop around.

Full press release: 'Hidden' pension charges costing Brits £37,000K warn experts

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