Over half of savers confused by fees
A finance expert has expressed concerns that more than half of pension savers do not understand that fees are charges they pay.
Holly Mackay said it is ‘bad’ that only 47% of pension savers are clear that fees are charges they are paying, according to its own analysis which surveyed 4,000 UK adults earlier this year.
The founder and chief executive of Boring Money reiterated the information as part of her seasonal look back at 2023 to examine the strategic backdrop the industry is facing, heading into 2024.
She said: “This is bad! Consumers remain baffled by the ongoing charges figures, custody fees, transaction fees and more. Better disclosure often involves supporting comparison and facilitating relative understanding – rather than explaining the intricate nuances of pricing.
“For all those worried about facilitating comparison, consumers rate a belief that a provider is being straightforward with them very highly when it comes to overall value and satisfaction computation. Which impacts acquisition, retention and likelihood to refer.”
She also reiterated her firm’s research, which found that 3.2 million people aged 45 to 54 have multiple pension pots and 0.6 million of them plan to consolidate over the next 12 months.
She argued that this a lot from just this one cohort.
She said: “At a time of both slower inflows and redemptions, pension consolidation will take up more provider attention in 2024. Although Pot for Life sounds more like a student mantra, expect growing interest in how more transparent, portable pensions will shake up the workplace pensions market and reduce the distinction between the retail and workplace markets, whilst increasing the need for transparency, comparison and better disclosure.”
