People could be left more than £70,000 poorer in retirement because they don’t understand charges when transferring their pension, according to new research1 from People’s Partnership2, which provides The People’s Pension to more than 6.5 million people across the UK.

Nearly three quarters of people who had recently transferred their pension (72%) didn’t know exactly what the fees for their old pensions were or what they were being charged for their new one. While on in 10 (11%) didn’t think their new pension had any fees or charges.

Analysis3 shows that for a 30-year-old earning £30,000, moving a £10,000 pension pot from a provider charging 0.4% to one charging 0.75%, would leave them £32,894 worse off when they retired at 67. If they moved a £50,000 pot, they would have £59,523 less to live on in retirement. And if the same person is earning £45,000 and moves a £50,000 pension, they will be £72,689 worse off in retirement. The calculations assume ongoing contributions of 8% and wage inflation of 3.5% with investment returns of 5%.

People’s Partnership believes the pension industry needs to be more transparent and should help savers understand key information when transferring their pension, to prevent them from making detrimental financial decisions for their future.

Commenting, Patrick Heath-Lay, Chief Executive Officer at People’s Partnership, said:

“While there are many factors that can make a pension attractive, the two fundamental aspects are investment returns and charges. Unfortunately, very few people know exactly what they are being charged for their pensions and they are being let down by an industry that doesn’t make this information easy to find or understand. If people can’t make an informed decision about the value they are being offered by different providers, they risk losing thousands of pounds from their retirement pots. This lack of transparency is an enormous issue that pensions providers have to address.

“Our research shows the real-world impact of small differences in percentages are incredibly hard to grasp, so the onus is on the pension industry to make sure consumers understand what they are being charged. We are taking direct action to provide our members with more guidance through the transfer process and are creating tools that will support them to make informed decisions that are in their best interests. We passionately believe that there must be an obligation on pension providers to give clearer information to those savers who are considering transferring and the industry must move to provide comparable consumer focused value metrics. ”

People’s Partnership found that only half (50%) of respondents said it was easy to find information on fees and charges from both their old and new pension providers. The research suggests fees aren’t anywhere near as important a consideration as they should be when transferring a pension, and that people don’t appreciate how seemingly small differences in costs can lead to significant differences in real terms.



Rymyni Adams-Taylor, aged 29, from Birmingham, saw an advert pop up on Facebook promoting a simple app to bring all her pensions together. She moved two old pensions into the pension consolidator, still paying into her existing workplace pension.

She did not do any research for two reasons. First, she was not aware that she could consolidate into her existing pensions. She feels that this is not well-known amongst people of her age. Secondly, she feels that all pension companies are the same.

To be honest, it wasn’t something that I’d done any research into. I wasn’t aware that there was more around. But I can’t see what another provider is going to provide that’s going to be a better deal because they’re all basically offering the same thing.”

She had no idea that costs could vary and felt disappointed this was not pointed out to her as part of the process.

“I don’t feel like they gave me that information. Especially for someone like myself, I don’t have experience in dealing with this. I didn’t go to any type of advisor for advice or what the best option was. They sort of enticed me in on the basis that it was easy to navigate and it’s a simple system to use.”

She tried to find her cost on the app and felt that it wasn’t very obvious to find.

“You had to click into a few different things. It wasn’t just on your homepage. I think I clicked four times before I found it.”