Pension pot blues

Fees and charges can eat away at your pension fund to the tune of up to 25 percent, according to new figures published in the Money Management Pension survey.

The worst example found was one policy offered by pensions provider Skandia, which would take £21,140 out of the projected pension fund.

The plan in question carries a 6.3 percent adviser fee, as well as a 0.5 percent trail commission. If fee free, someone investing £200 a month over 25 years could expect a pension of £157,494. But the Skandia plan would be worth just £120,050.

Of course, Skandia are not the only villains of the piece. Come in Axa, whose with-profits personal pension would, applying the same set of values, be worth just £127,853 after charges. A Legal & General plan would be worth only £122,225. In contrast, the best fund with the highest yield was B&CE – worth £142,566.

High charges are often accepted if the performance is top notch, but this isn't always the case – especially in these times of debt crises and global economic woe.

Legal & General last week notified more than 100,000 people who hold pension plans with them that their charges will rise from next year.

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