Liberty SIPP

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What are YOU paying for your pension?

Pensions are going to be one of the longest on-going financial products you will ever invest in, therefore you should be aware of the fees and charges of these products more so than any other. I believe that purchasing a pension product is a bit like buying a car, in that you don’t just look at the initial value you also look at the continuing cost i.e. petrol, tax and insurance. For too long providers haven’t been disclosing their full list of charges and clients are losing out financially on the most important investment they will ever make.

All different pension products have different charging structures. Some will take set fees upfront and then on an annual basis, some will charge fees based on a percentage of the fund, some will take cuts of interest rates agreed with the bank and some will take fees every time you wish to invest in something new. The worrying thing is that providers aren’t sticking to just one of these, they are combining a few of them and in some cases all of them. As the client you will normally just see the upfront charges and then forget about it until it’s too late.  You need to be asking certain questions when you enter into a pension product. Am I getting 100% of the interest rate, and if not where’s the rest going? What do they charge me to take benefits from the scheme? Do they charge me to make contributions?

It’s so important to check how much you’re actually paying, as in most cases it can be quite surprising!

Jan 4, 2012