"Some savers with the oldest pensions are at serious risk of actually losing money through high charges on their pensions."
Savers could be paying over £2bn in unnecessary pensions management charges each year, as an estimated £180bn of personal pensions are being held in over-charged pots, according to Profile Financial.
Its research shows the annual average fee people pay on their pensions is 1.47%, however some pension providers charge as little as 0.34%, meaning over £2bn is being wasted in unnecessary pension fees each year.
A 35-year-old with the national average £22,000 pension pot, paying the average fee of 1.47% could save over £9,000 by switching to a lower cost provider at 0.34%.
Additionally, 41% of people have never spoken to an adviser or their pensions manager about their pension. As a result, over a third (38%) of people don’t know the investment performance of their pension, and the same numbe don’t know how risky their pension investments are.
Simon Vella, Pensions Expert at Profile Financial, said: “For most people, their pension is their biggest financial asset aside from their house. But while everyone knows the value of their property, and how much the mortgage costs each month, very few people know the total in their pension and how much they pay in fees each year.
“The fees are a scandal, but the issue actually goes way beyond this. Having lazy pension pots can also mean your savings are not invested properly to match your expectations, and it can mean you won’t be able to take advantage of new pensions freedoms when you want to retire.”
Billy Burrows, independent pensions expert, added: “As people live longer, it’s more important than ever that those approaching retirement see their pension pots continue to grow. Unfortunately, far too many are paying charges that are far too high.
“Some savers with the oldest pensions are at serious risk of actually losing money through high charges on their pensions. Hard-working savers spend their entire careers grafting for others, it is only right that their pension pots work equally hard to provide a comfortable retirement for them.”