Pensions expert Richard Jacobs today welcomed an Office of Fair Trading report which recommends greater transparency for pensions schemes but warned pension buyers that low management fees may not represent best value.
A new OFT Report highlights high management charges, prompting the Government to consider the introduction of a cap.
But Richard, of Richard Jacobs Pensions and Trustee Services Ltd, advised customers that concentrating on management fees alone may lead to some customers losing out.
“It is far too simplistic to simply concentrate on how much is charged to manage a pension,” said Richard of Newcastle-under-Lyme, who has over 40 years experience in the industry. “Fees have to be studied alongside performance to assess real value for money.
“Performance can vary by as much as 40 per cent which means that if you get a good performing fund with higher charges then that will still prove better value than some low performing funds with lesser charges.
“A pensions review through an independent adviser will reveal the true impact of your fund – customers should not just jump from one fund to another because they perceive the fees to be high.”
The Government has decided to go ahead with a consultation on a cap for auto-enrolment schemes with Pensions Minister Steve Webb suggesting that a one per cent limit may be considered.
Meanwhile, OFT Chief Executive Clive Maxwell said that while they were “holding off for now,” the OFT might consider a cap in the future.
For further information contact Richard Jacobs on 01782 557800.
Notes to Editors: Richard Jacobs Pension & Trustee Services Ltd was established in 1992 and operates from offices in Water Street, Newcastle-under-Lyme.
The company is run by Richard Jacobs, who has experience in financial services industry dating back to 1971, and Emily Jacobs a Director in the company and daughter of the founder.