Pensions 'Theft'

SKY-HIGH charges and fees are wiping thousands of pounds off private pensions savers are relying on for their old age. People risk losing as much as a quarter of the value of their pension pot shocking new figures revealed yesterday. In the worst case found by the Money Management Pension survey, experts discovered a Skandia pension plan that had a 6.3 per cent “adviser fee”, plus 0.5 per cent “trail commission” that must be paid each year to the adviser who set up the scheme. It means the plan would produce a pension of just £120,050 for a worker investing £200 a month over 25 years, instead of the £157,494 it would be worth if it was fee-free – a massive loss of £157,494.

But Skandia was not the only pension company that was named and shamed in the new survey. Someone making the same payments into Axa’s with-profits personal pension would get only £127,853 after charges and a Legal & General plan would be worth just £122,225. The best fund with the lowest charges was B&CE – its plan would be worth £142,566. Joanne Segars, chief executive of the National Association of Pension Funds, said:

“High pension charges can eat away at savings and end up knocking a sizeable chunk out of a pension pot.

“Pensions must work for people, not for the financial companies that provide them.

“The UK faces a massive challenge in saving enough to pay for its retirement. But there’s no point in bringing people into pensions that will erode their savings through high fees.

“So it is vital that pension charges offer good value for money and become simpler to understand. People must be able to scrutinise them more easily.”

Prashant Vaze, chief economist at Consumer Focus, said:

“Charges levied by independent financial advisers and pension companies mean some consumers lose out when they attempt to do the right thing and save for their future.

“Personal pension costs and charges are often complex and opaque and this lack of transparency makes it difficult for people to shop around or know if they are getting a good deal.

“Sadly, practice by some operators in this market leaves much to be desired.”

The survey comes only days after Legal & General told more than 100,000 pension investors that it is raising its management charges from July 31 next year. Tom McPhail, head of pensions research at Hargreaves Lansdown, said: “It’s important investors make sure they not paying for services they aren’t benefiting from. The older your plan is, the more likely it is you’ll benefit from switching to another pension company. Expert Dave Penny of Invest Southwest said billions of pounds are languishing in so-called “frozen” schemes that workers leave behind when they move onto new jobs and often forget about. He said:

“The public have been so negatively brainwashed by the relentlessly suffocating wave of bad news about pensions, that they simply switch off.

“Pension providers use this to continue to decimate pension funds with charges. The funds are often no longer actively managed, so the historically questionable benefit of the charges is long gone. It is tantamount to theft.”

Adapted and edited from The Express here.

So not content with robbing us of our labour all through out working lives, pensions experts are now finally admitting what many have known all along and that is we are being robbed into our retirement as well. The fact is the costs to capitalism of raising us from birth and looking after us in sickness and old age are a drain on profits. We are only really useful to them as fit, healthy workers who can make profits. Pensions, child care, education and health are all expenses the capitalist class can do without as their needs are always covered. Not so for the rest of us....

SussexSocialist