Buyers of personal pensions have been ‘misled about the level of hidden costs and charges’, according to a UK think tank.
Following a year-long investigation into the pensions industry, the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) published Seeing through the British Pension System.
According to the report, 21 out of 23 providers surveyed denied there were charges other than the annual management charge and administration costs.
The RSA, however, said it had evidence that those selling pensions were passing on audit and custodial costs to customers as well as other “hidden” costs, such as taxes, stock lending fees and broking commissions.
“The enormous impact of fees, where an extra 2% annual charge can, over the lifetime of a pension, result in a halving of pension benefit, is not understood by individual consumers or by small employers,” the RSA said.
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