More than four in five (84 per cent) UK adults are unaware that they pay annual charges on their pensions, according to Profile Pensions.

Its research found that just 16 per cent of UK pension savers know that they pay charges, with 62 per cent saying that they don’t pay any charges and a further 21 per cent said that they did not know.

Furthermore, nearly half (47 per cent) of respondents admitted that they did not know how to find out what charges they pay.

Commenting on the findings, Profile Pensions chief investment officer, Michelle Gribbin, said: “The fact that so many people have no idea that they pay charges in the first place, let alone what those charges are or how to find out, should be a massive cause for concern.

“Add to this the thousands of people that are being needlessly overcharged and there are some serious questions to be answered about why awareness is so low.”

According to Profile Pensions data, pension savers in the UK pay on average three times more than they should (1.09 per cent annually).

Profile Pensions said that a lack of awareness and engagement from savers could cost them £18,000 over 20 years.

Gribbin continued: “It’s clear that the industry needs to take action and providers need to work harder to educate consumers.

“As impartial advisers we see instances every day where customers will have smaller pensions at retirement than they should due to lack of transparency from providers. This is simply unacceptable and means that thousands aren’t realising the full potential of their pensions savings.

“These statistics are shocking and a timely reminder that people need to take action, as early as possible, to make sure that they are facing retirement confident that they have enough money to live on.”

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