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Pension fees again in the spotlight: when was the last time your friends and family checked their own?

Pension fees have again come under the microscope in the popular press over the last month. A report on European pension funds indicated that excessive charges could be damaging the savings potential of many savers across Europe.


Whilst the funds of Jones Sheridan clients are carefully monitored to ensure excessive fees are avoided, it is not unknown within the pension industry for independent savers to find themselves subject to significant and unexpected charges.


Pension funds are often charged an AMC (Annual Management Charge), which is normally a percentage of the total fund. Initial charges may also apply and, if you decide to transfer your pension, a transfer fee may be charged. Older pension schemes can also have further charges, which you now rarely see in newer, more forward-thinking funds.


A particular recent report highlighted that in regard to many funds across Europe, ‘it has become increasingly clear that the main culprit for the disappointingly low returns of pension savings products is the excessive level of fees and commissions charged’. Tracking where these fees come has been difficult in some cases, with the report stating that around 80% of total fees can essentially be ‘hidden’ from savers.


As current Jones Sheridan clients will be well aware, we make our fees very clear, and will talk them through with you in detail to ensure you are familiar with what they mean and how we apply them.


However, for friends or relatives who are not currently clients of ourselves or another Independent Financial Adviser, it is worth checking if they have noticed a substantial amount of their savings disappearing into fees and charges. As mentioned, older pension pots can be particularly affected by this and it can be something that older relatives who have had their savings in the same place for years can be particularly vulnerable to.


If a friend or family member has any particular concern then do feel free to pass on our details. We will be able to examine their current situation, at no cost, and give them an indication of whether their charges look too high compared to the industry norms we see on a daily basis.