Pension investment funds could be ripping people off and denying them thousands of pounds worth of income in retirement, a seminar was told.
There are some 17,000 pension funds in the UK and financial experts told a seminar on retirement planning in Woburn that they often come across people paying fees as high as 5 per cent a year.
“People could be paying £4,000 extra in fees on a fund of £100,000 and that is each and every year,” said Tony Byrne, of Wealth and Tax Management, based in Shirwell Crescent, Furzton Lake, Milton Keynes. “We come across it time and time again.”
If the fund is not growing fast enough, that could mean it having less in it than has been invested. With lower fees, the total fund would receive more, adding up to bigger payouts at retirement.
The free seminar, held at the Inn at Woburn, in George Street, yesterday (Thursday) afternoon, is one of a series organised by the company on financial matters.
Roger Prest, managing director of Wealth and Tax Management, said many people put infomation about pensions to one side, which could be a costly mistake in the longer term.
“Putting things off means higher cost,” said Mr Prest. “It is very important that you take action. We would like it to be with us, but the most important thing is to take action.”
By taking action on fees, optimising investment performance and making sure tax reliefs are claimed, the seminar was told that it was possible to boost pensions without paying more in contributions.
Mr Byrne added: “By far the biggest difference can be made with fund performance, of 5, 6, 7, 8, 10 per cent a year.”
And the seminar heard that people paying into company money purchase schemes might also be able to re-direct a chunk of their investments into better funds.