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Campaigns | Better pensions

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Government to consult on pension exit charges

Following concerns that some pension companies are not giving their customers full flexibility over how they access their savings, it's good that the Government is looking to strengthen savers' existing rights to transfer their pension to a provider who will.

A consultation to be launched next month will include proposals to put a cap on high exit fees imposed on savers, which is seen as one of the major barriers preventing people from transferring their pension easily between providers.

Which? executive director, Richard Lloyd, said:

'The Government must act to allow people to switch pension providers without being stung by excessive fees if they will not offer the new freedoms.  

'The Government must also work with the regulator to ensure products offer value for money, and consider what further reforms are needed to make the market truly work for consumers, including a charge cap on default drawdown products.'


Over 55s fear pension scams - Which? research

Our research finds that a third of over 55s have been contacted about their pension by companies that could be frauds, yet many aren't sure they can spot a genuine investment and four in ten think they could fall victim to a scam.


We're calling for better pensions

We’ve launched a new campaign to secure better pensions after our research reveals people’s pension pots could be at risk from poor value products and high charges.

The Government’s pension reforms are set to give people more control over their pension pot. This makes it likely that more people will use income drawdown products, which allow them to take money out gradually each year.

High charges

However, our investigation uncovered several high charging drawdown products, including one that charges 2.76%. We think this is too high for the mass market and want to see a cap introduced on products sold to customers by their existing provider.

Based on a scenario of someone with the typical pension pot of £36,000, drawing down £2,000 a year, we calculate that a cap of 0.5% would leave someone in our scenario around £10,300 better off than with charges at 2.75%. A 0.75% cap would mean that they have a total of around £8,800 more over their retirement and a 1% cap would give them around £7,500 more.

Our executive director Richard Lloyd said:

'It’s right that the Government is giving people the freedom to decide how and when they access their hard-earned pension savings, but deciding how to use these savings in retirement is one of the most complex financial decisions many will have to make and one they cannot afford to get wrong.

'That’s why we want the Government to take action to secure better pensions so people have just as much protection when they take money out of their pension as when they put money in.'

You can help us secure better pensions by signing our petition.


Government cracks down on hidden pension charges

The Government has committed to greater transparency on hidden pension charges in a win for our Hands off my Pension campaign.


Pension fees cap for auto-enrolment schemes

Pensions Minister Steve Webb has launched a consultation on capping pension scheme charges for employees signed up under auto-enrolment. He is considering an outright ban on all charges above 0.75%.

Unfair workplace pension charges… banned!

We lobbied the Government for a ban on consultancy charges for work place pensions and won.

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