Fees that can halve the value of your pension

Millions of savers are being misled by City fund managers about hidden fees that can almost halve the value of their pensions, a year-long study has found.

Nine in 10 of the country’s biggest pension fund managers fail to warn people about the levies, which typically wipe more than £100,000 from the value of a middle-class worker’s pension.

The report by the RSA, a think tank, found that workers were routinely denied simple, low-cost pensions that are readily available elsewhere in Europe. Ministers said they were prepared to intervene unless pension funds reduced their fees and became more transparent.

The research was published as official figures showed that 11 million people were failing to put enough money into pensions, which will leave them struggling in their retirement. Many people have abandoned pensions entirely following a decade of negligible investment returns from their savings.

The Government hopes to resolve the retirement crisis by “auto-enrolling” workers into pensions from later this year, which had led to growing concerns that millions more people could be “ripped off”.

Steve Webb, the pensions minister, said: “Charges are reducing and we expect them to go down even further now that other players are entering the market. If this does not happen however we have the power to act and we will.”

Read more: http://www.telegraph.co.uk/finance/personalfinance/pensions/9407283/Fees-that-can-halve-the-value-of-your-pension.html