Private pension firms have also been accused of hiding some of the costs they levy on customers' investment funds. The RSA recommended that the UK copy the example of Denmark where people taking out a personal pension are given annual statements, like a bank account, revealing the full impact each year on their investments of all charges and costs.
About six million people contribute to personal pension plans, according to recent figures from the Office for National Statistics (ONS). Ros Altmann, the director general of Saga, said: "Pension charges are too high and too complex. If your car is serviced in a garage you get an itemised bill explaining what each charge is for, which part was replaced and what the labour charges are, all in pounds and pence. No one would quote the fee as a percentage of the value of your car, which would be meaningless. But this is what happens with pensions, drawdown plans and annuities."
But the Investment Management Association criticised the report, describing it as "sensationalist headline-seeking". "It does itself no favours by quoting discredited research which exaggerates the cost of managing pension investments many times over," said Richard Saunders, chief executive of the IMA.
"For retail funds there is already a gold standard of charges disclosure, mandated under EU rules put together after extensive consultation and consumer research. "We need that standard rolled out across the whole pensions and long-term savings market," he added. Our experienced IFA’s at Enable agree.
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