How To Stop Being Overcharged On Your Personal Pension
It was recently revealed on a popular TV show that around 86% of existing pensions in the U.K. are being grossly overcharged through inordinately high administration and commission costs. Read this article to discover how to get your pension working as best as it can for you and potentially save yourself thousands of pounds. There are new rules which mean that many people who don't already have a pension will end up in a company pension, which basically means that they just need to go for whatever their employer offers. To receive any contributions made by your employer, you would just need to agree to be part of your employer's scheme. If however you currently have your own private pension (where only you contribute) then it is essential that you look at what you are being charged on a regular basis. Your absolute best option is to get advice from an independent financial adviser (IFA) given there are a mind boggling array of charges to watch out for. A word of caution though... make sure that the IFA you choose is particularly savvy on Pensions and not just generalised finance. Many pension reviews consist largely of just moving funds around, with little attention being paid to the hidden multi layered charges, which are what slowly eats away at the fund value. Normally, a review of this kind will set you back a few hundred pounds, but probably better to pay that upfront now so you don't end up losing thousands of pounds between now and when you retire. However, if you are a financial whiz and you find all this pension stuff straightforward, you can head straight to your pension company and sort it all out yourself. If not, and considering the fact that pension charges are not regulated for existing policies, then it is absolutely crucial that your pension is regularly reviewed by a pension expert. There are also quite a few specialist pension discount brokers. You just need to tell them the type of pension you want to change to and they arrange it without giving you advice. This means they return some of the commission and other charges back into your fund, effectively reducing the charges compared to going direct. Again, this option is only recommended if you have a very good idea of what you're looking at.
A final important fact worth noting is that pension companies were recently forced to reduce charges by around two thirds, but only for new customers. Although we're only talking about percentages here, the compounding effect of multiple charges on your current policy means your fund could be thousands down on what you might expect it to be when you retire. The solution to the problem is to get your pension reviewed NOW (by an expert), not later! Each day that goes by means a little more of your hard earned retirement money trickling away down the drain on charges that you needn't be paying.
About the Author
For a non biased expert review of your pension charges at NO COST to yourself, and to get your pension working as best as it can go to: http://www.pensiondoctor.org.uk
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