'Massive' knowledge gap leaves 42% of savers unsure of pension fees

EQi has warned of a "massive knowledge gap" amongst millions of savers, after research revealed that over a third (35 per cent) of savers, equal to around 18 million people, have never reviewed their plans for retirement.

Furthermore, the firm has found that around 35 per cent of pension holders are unsure how much they have in their pension pots, whilst 42 per cent don’t know how much they are paying in pension fees.

The firm warned that these fees could “rack up to a significant amount of money over time”, with previous industry research warning that some charges could completely erode pension pots over time.

EQi's research also found that just 4 per cent of pension holders review or switch their pensions at least once a year, noting that, by comparison, those surveyed were much more proactive when considering other financial products.

For instance, it found that nearly three quarters (73 per cent) of respondents reviewed their car insurance annually, whilst 61 per cent reviewed home insurance annually, and 17 per cent reviewed their savings accounts annually.

Commenting on the findings, EQi director, Richard Pearson, stressed that the figures were "extremely concerning" and had uncovered a "massive knowledge gap amongst millions of people" who seem "completely disconnected" from their retirement savings.

He continued: “While the introduction of auto-enrolment got more people saving into a pension than ever before, it has also compounded issues surrounding awareness.

“A huge proportion of workers now don’t know how much they’ve saved and whether it will be sufficient to support them later on in life.

“With so many people switching jobs throughout their career, which could be 50 years long, the risk is that they end up with a trail of legacy pension pots scattered across different providers, with no single view of how they are performing and how much they are paying in fees.

“It’s ironic that in a country where consumers are urged to review their insurance policies, home energy bills and savings accounts on an annual basis to save tens of pounds, they could be losing hundreds, or even thousands of pounds on fees and poorly performing pensions, arguably the most important financial product they will ever own.”

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