Retirement savings are seen as the key to a comfortable retirement, but many are unaware of the potential implications. A new study has shown that less than half of UK adults on a pension say they ‘care’ about the charges they pay.
The B&CE study illustrated a detachment from retirement savings that could be devastating for retirement.
The higher the charges in a person’s arrangement, the less he will receive later.
High-fee agreements could therefore erode a person’s retirement dreams.
In comparison, many more Brits are interested in other financial aspects of their lives.
READ MORE: 1.25% National Insurance contribution for pensioners may be increased to 13.25%
The website explained: “The fees you pay are important because, although the performance of your investments may go up and down, you will still have to pay the fees.
“Over time, fees can make a huge difference in your returns.
“Even relatively small differences in ongoing costs can add up over time.”
The B&CE poll also showed that 16% of respondents thought they didn’t have enough savings for the fee to make a difference.
However, the evidence indicates otherwise and complex charges could have serious consequences.
Phil Brown, Director of Policy at B&CE, said: “This research is further proof that the average saver does not understand the impact that charges can have on their retirement pot.
“At a time when people naturally watch what they spend, it’s important consumers know what they’re paying for in retirement.
“It’s potentially the most valuable asset a lot of people have.”
With charges, it is important to weigh what a person will pay against what they will actually get.
Fortunately, in recent years, charges on pension plans have improved.
However, for those with older arrangements, some action may be required.
It may be appropriate for the British to shore up retreats to avoid heavy charges.
Before taking any action, it is essential to undertake research and possibly seek financial advice on this matter.