Half of pension contributors are unaware of annual fees diminishing their retirement savings. Half of those who know about these charges don't know the amount, and 73% don't know how to find out.
Only 32% of people think they know their charges, while 18% know the exact amount. On average, contributors pay an extra 2.5% annual charges, which MoneyFarm research deems overpriced. Despite this, 53% believe this is reasonable, leading only 23% to shop around or switch providers.
For example, a 40-year-old with £40,000 in savings, aiming to retire at 67, with an annual growth of 5% and a 2.5% pension charge, will have a pot worth £78,000 without further contributions. However, with a 1% pension charge, the pot would be worth £115,000-a 48% difference at retirement.
Additionally, 76% of people are unaware of the VAT on their pensions, with 46% of respondents shocked by the added admin fees.
Over three-quarters of people feel overwhelmed by pensions and saving for the future, and 39% find pensions the most confusing financial responsibility.
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