Pensions - Articles - Myth of rip-off pension charges exposed as untrue

 The DWP’s ‘Pension Charges Survey 2016’ found that over 98% of members of Defined Contribution workplace pensions used for automatic enrolment were facing charges of 0.75% or less. The survey covered over 15 million pension pots across 228,000 workplaces.

 Commenting, Steve Webb said: ‘Members of workplace pensions are paying less than a penny in the pound to save in a workplace pension. For every pound that they save, their employer will often contribute an additional pound, and their pension contributions also attract tax relief. For an investment of 80p after tax relief, a worker can get two pounds in a pension, and less than two pence of this will pay for the cost of running the scheme. This is incredible value for money and explodes the myth that anyone in a pension is at risk of ‘rip-off’ pension charges’.

 DWP has also announced plans for greater transparency in pension scheme charges.

 Steve Webb added: ‘Well run schemes should have nothing to fear from greater transparency on costs and charges. Trustees and governance committees will welcome additional information which will help them to ensure that their members’ money is invested in a way which delivers maximum value-for-money’.