People have 'no idea' on pension charges says Aegon boss Adrian Grace
PERSONAL pensions are too expensive and 90 per cent of savers do not understand how or know what they are being charged for by insurers, Aegon chief executive Adrian Grace claims.
The UK chief of Dutch insurance giant Aegon said that the pensions industry has a history of charging high fees and overcomplicating the subject, to the detriment of savers.
He said: "The industry has done a poor job of breaking things down and has made things too complicated.
"I believe 90 per cent of people do not understand or even know how much they are being charged for their personal pension.
"They genuinely do not know.
"How is that good for the customer?"
He added that while insurers and pension providers should do more to make products simpler to understand and improve transparency, consumers need to pay closer attention to the fees they pay and the investment performance of their pension.
People do not look at how it is performing or what the options available to them are
"A pension is the second biggest financial asset outside of their home and yet people do not look at how it is performing or what the options available to them are," he said.
"People spend more time deciding where to go and booking a holiday or buying a pair of jeans than on their pension.
"People need to look at their pension like they would their gas bill or bank charges, at the charges and performance."
From April 6, people no longer will be forced to purchase an annuity, which guarantees them an income for life in exchange for a cash lump sum, when they retire.
In the Budget, Chancellor George Osborne announced that retirees looking to sell their annuity will no longer be hit by punitive tax charges.
