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“Worrying blind spot”:
Half of Pension Investors in the UK
Unaware of Scheme Fees

Pensions News

50% of surveyed individuals with pension schemes in the UK are unaware they are paying annual fees. Only half of those who are aware know how much they're paying.

Half of Pension Investors in the UK Unaware of Scheme Fees.

Startling statistics from the investment platform Moneyfarm have revealed that half of UK adults are not aware that they are paying ongoing annual fees on their pension schemes. The average fee on these schemes is 2.5% per year, which may not seem like much but can quickly add up to a significant sum over the course of the scheme.

Financial advisers and wealth managers in the UK are coming under increased scrutiny about the transparency of their fees and pricing structures and, in some cases, are preparing to reimburse customers for hidden fees and fees for ongoing advice that has not been provided.

In the survey of 2,000 UK adults, Moneyfarm found that, of the 50% who did know that they were paying annual fees, only half knew exactly how much and 75% of the total respondents did not know how they would go about finding how much they are paying. Just 18% of those surveyed knew exactly the amount of their fees.

Unsurprisingly, as most respondents were either unaware that they were even paying fees or had no idea what they were paying, the average annual charges of 2.5% are deemed “way over” what should be considered a reasonable amount of around 1%, according to a Moneyfarm expert, Carina Chambers:

“If [a saver aims] to retire and draw from their pension at the age of 67, with 5% annual growth and a 2.5% annual pension management charge, their pension pot could be worth £78,000 without paying in anything else. Exactly the same pension pot with a 1% annual management charge could be worth £115,000. That small 1.5% difference could mean an extra £37,000.”

Clearly, it pays to understand the fees associated with any pension schemes, as they could cost savers a significant amount of money over the scheme period.

While in many cases, the related fees for pension schemes generally cover fund fees, platform charges, and management charges, it is important to fully understand what is involved and whether you are receiving all of the services you are paying for – especially if you’re being charged over the odds.

The Financial Ombudsman Service (FOS) is the independent, government-backed body responsible for investigating and resolving disputes between financial institutions and their customers and has the power to award compensation in certain cases. They can deal with complaints relating to regulated financial adviser and wealth management firms who have been charging investors annual fees for advice and regular performance reviews that have not been delivered.

At TLW Solicitors, our specialist team can investigate concerns customers may have about being charged fees for ongoing advice by financial advice firms, including:

If you have engaged with a financial adviser and think you may have been paying ongoing pension fees for services you have not received, e.g. annual reviews, speak to TLW Solicitors’ experienced financial mis-selling team.

Working on a ‘no win – no fee’ basis, TLW’s experienced professional negligence lawyers can help you through the compensation process, whether this is settled in the early stages directly with your financial adviser or through FOS.

TLW Solicitors’ team has extensive experience successfully taking cases to FOS and securing client compensation, even if they have been knocked back previously.

Sarah Spruce, Legal Director and Head of the Professional Negligence department at TLW Solicitors, commented:

“With any managed financial service, it is extremely important to understand what fees and charges are associated with the product you have purchased, but it is evident from the Moneyfarm data that this information is not presented transparently enough for all investors. At best, this can lead to savers finding themselves paying over the odds for things like management and platform fees and, at worst, paying for services they are not receiving, such as ongoing advice and pension scheme reviews. If you believe you are in the latter category, speak to my team who can review your case and determine whether you are eligible to make a ‘no win, no fee’ refund claim.”

If you have been mis-sold a financial product, received unsuitable advice from your trusted financial adviser, or paid for ongoing financial advice and reviews that you never received, you may be entitled to compensation.

Get in touch with the professional negligence team at TLW Solicitors for a no-obligation conversation about your claim.

You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete the ‘Start Your Claim’ form below.

Time limits can apply, and so anyone wishing to bring a claim should do so without delay.
Minimum claim values apply.

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