Brits warned over ‘zombie’ charges that could be ripping off savers thousands of pounds
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Brits who have money stuck in an old work pension have been warned over 'zombie' charges that could be tucking into your savings.
With the cost-of-living crisis in full swing, savings will be needed more than ever, that's if you're lucky enough to have any in the first place.
But for those with old pension schemes, it's important to be wary of how the updated rules, which were introduced in 2015, might have affected your savings.
According to financial advice firm Quilter, modern workplace pensions typically charge between 0.2 percent and 0.4 percent of your pension per annum, reports The Sun.
However, prior to the 2015 ruling that capped charges at 0.75 percent for new schemes, it seems that people were paying a lot more.
Quilter claims that it's not uncommon for old workplace pensions to be charging up to 1.5 percent, with previous schemes being as high as 2.5 percent.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, says: “High charges from older pensions gnaw away at your pension value and over time they can make a big dent in your pot.
“Moving all your pensions into one pot can slash the fees you pay and mean you retire with a much larger sum saved.
“However, it’s vital you check that you aren’t losing out on valuable benefits by doing so and seek advice if necessary.”
So if you're stuck with an old pension scheme, it's worth checking with your provider how much you're being charged.
Then you might be able to switch to a lower scheme.
Tom Selby, head of retirement policy at AJ Bell, explained: “You could then move all your pension savings to the scheme with the lowest charges.
“If you don’t already have a new pension to transfer older ones to, you can set one up online in a matter of minutes.
“If you do decide to switch, the new provider you’ve chosen should be able to do most of the legwork.”
Mary Green, an independent financial adviser at Rosewood Financial Planning, added: “Not many people have a job for life these days and so they tend to accumulate old pensions, which don’t necessarily add up to much on their own.”
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Hopefully you'll be able to save a few quid.