New measures could break down ‘wall of unawareness’ around pensions
24th May 2022 16:50
by Rebecca O'Connor from interactive investor
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interactive investor comments on plans from the Pensions Regulator and the FCA.
The Pensions Regulator and the Financial Conduct Authority (FCA) today confirmed plans to drive value for money for pension customers, by introducing measurements that “will allow industry professionals and pension savers to better compare defined contribution pension schemes so they can see which offers more value for money.”
The Pensions Regulator added: “Over time, this greater transparency should improve competition, encouraging pension schemes to improve the value they provide and help deliver more secure retirements for savers.”
According to interactive investor research, 77% of people do not know what fee they pay for their pension. Of the less than a quarter who knew the fee, 60% had no idea if it was good value or not.
Becky O’Connor, Head of Pensions and Savings at interactive investor, which offers a low-cost, flat fee pension, said: “It’s not acceptable that people don’t know how much they pay for a pension, which is possibly the biggest amount of money they have to their name. Many don’t even know that pensions don’t come for free.
“It’s high time a light is shone on pension charges. These measures could break down the wall of unawareness around what a pension is and how it works. Better transparency and understanding around fees will enable people to compare costs and charges and will require providers to justify their fees.
“If people feel they could get better value for money elsewhere, it could lead to more consolidation and switching and ultimately to millions of pension holders in the UK saving thousands of pounds they might have had no idea they were even being charged.”
Interactive investor launched ‘Pension Builder’, the low cost pension that costs £12.99 a month, in February this year.
Notes to editors
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