People saving for their pension could have to spend several years longer at work than they expected if they fail to choose the right schemes, a report for the National Association of Pension Funds (NAPF) has warned. High pension charges and the wrong choice of annuity could cut pension incomes by as much as 24 per cent, potentially putting a halt to any plans to carry out a quick home sale and move abroad after retirement.
Charges for stakeholder pensions are capped at 1.5 per cent for the first ten years and one per cent after that, but by negotiating a long-term 0.3 per cent rate, savers could improve their retirement income by 17 per cent, according to the research. The report also revealed that around one-third of people do not shop around for the best annuity.
“People who don’t get the best out of their pension could end up stuck at work for years longer than they planned,” said Joanne Segars, chief executive of NAPF. “Getting a good deal on charges and annuities can mean the difference between enjoying retirement and spending years more at the desk.”
