How much are you really paying for your pension?

Fidelity International is urging pension savers to review their existing pension plans, as new research shows six out of ten savers have no idea how much they are paying every year in charges.

Nearly a third of people (31 per cent) with a stakeholder pension and one in three (33 per cent) with a Self-Invested Personal Pensions (SIPP) are unaware of the charges they pay. Of those who are aware of charges, more than a quarter (27 per cent) feels that they are set too high. This figure rises to 46 per cent among those with a SIPP.

The research also found that one in three pension savers (33 per cent) admitted to not even considering the charges when they took their policy out, despite the fact they could be squandering hundreds every year in unnecessary high charges.

David Dalton-Brown, Head of Fidelity FundsNetwork said: “Most people would not dream of paying over the odds for their gas bill or their car insurance, yet a pension, as one of the most important pieces of financial planning you will ever do, is often overlooked. It is equally important that savers in to personal pensions, including SIPPs, make the most of their savings and ensure that high charges are not eating away at their long term returns.”

“Our SIPP based pension options are completely flexible and offer a huge variety of funds for inclusion, whether a simple tracker, or more exotic emerging markets funds. This makes them equally suitable for the saver who wants the low-cost easy option, perhaps by combining it with a simple index tracker fund as well as the one who is happy to actively manage the portfolio themselves.”

Whether investors want to make their own investment decisions or speak to an adviser, Fidelity International and Fidelity FundsNetwork offer them two clear options each with a special offer currently running:

Fidelity Personal Pension

Minimum contribution to the Fidelity Personal Pension is £10,000 for lump sums or transfers. Regular savings start at £300 per month or £3,000 per year. Investors who save into the Fidelity Personal Pension up to the 30 April 2008 will pay no set-up fee and no annual administration chargefor the life of the plan. Savers can call 0800 085 0923 for a personalised illustration of what their pension could give them in retirement.

The Fidelity Personal Pension will accept transfers from personal pensions and other SIPPs, but not from occupational pension schemes including EPPs, SSASs, Section 32s and AVCs. Savers with more complex retirement needs – such as drawdown, or a transfer from such occupational schemes – can be referred by Fidelity to local independent financial advisers.

Fidelity FundsNetwork SIPP (advised investors only)

FundsNetwork is waiving core plan fees for IFAs who make platform mutual fund investments on behalf of their clients of £150,000 or more, placed into the FundsNetwork SIPP between Monday 4th February 2008 and Friday 2nd May 2008. This means that the only fees paid by investors pre-retirement will be the underlying annual charges on the funds and any charges relating to adviser commissions. Other administration charges will apply if a client makes use of income drawdown in retirement.