New research from PensionBee reveals that the majority of pension savers (67%) find information on fees complex and difficult to locate.
The leading online pension provider found that almost half (47%) of respondents do not know how much they are paying in fees, with 24% reporting that they don’t know how to find this information. Of those that do know how much they are paying in fees, 29% report that they had difficulty in finding or understanding this information.
These findings support ongoing work by the Financial Conduct Authority (FCA) and The Department for Work and Pensions (DWP) on simplifying pension charges for the benefit of savers. The FCA has recently consulted on costs and charges in workplace and non-workplace pension schemes, whilst the DWP seeks to increase clarity in Auto-Enrolment schemes by introducing a single annual charge. There is also ongoing work to simplify the annual statement, although there are currently no plans to include costs and charges on the new version following pushback from providers (1).
In 2019 PensionBee became the first pension provider to adopt Simpler Annual Statements and more than two years later only a handful of providers have switched to the new format (2). In 2020 PensionBee became the first provider to include charges in pounds and pence in its Statements (3).
Clare Reilly, Chief Engagement Officer at PensionBee, comments: “Hidden charge information continues to undermine consumer confidence in pensions. Whilst progress is being made there is a long way to go before savers get one all-in fee in pounds and pence mandated on annual statements. These are the basic requirements for building trust, engagement and confidence in pensions.”
Table 1: Fee complexity
|Do you know how much you’re paying in fees?
|Proportion of respondents
|Yes, its very clear and easy to find
|No, I don’t know how to find this information
|Yes, its clear but not easy to find
|Yes, its easy to find but not clear
|No, I haven’t tried to find out because I trust the fees are reasonable
|No, I know where to look for this information but it’s too complex
|No, I haven’t tried to find out because I think its going to be difficult to find or understand
Source: PensionBee, July 2021. 498 respondents. Numbers have been rounded.