Jurisdiction(s):
United Kingdom

UK workplace pension transfers: small charge increases and poor transparency could cause £70k+ retirement shortfalls; many savers consolidate without advice

Published on: 21 February 2024

Published by a Law360 reporter

Legal News

Article summary

People’s Partnership

On 19 February 2024, People’s Partnership—one of the UK’s largest workplace pension providers—stated that a 30-year-old earning £30,000 could end up with an almost £33,000 shortfall in their retirement funds by the age of 67 if they transferred a £10,000 pension pot from a scheme charging 0.4% to one levying 0.75%.

For anyone moving a £50,000 pot, the potential hit to retirement savings could total as much as £59,523, the profit-for-people body noted.
If the same individual’s pay rose to £45,000 and they chose to transfer a £50,000 pension, the predicted gap at retirement could rise to £72,689.

People’s Partnership surveyed 1,000 people between November and December 2023 who had brought together their workplace pensions within the past two years without the help of a financial adviser. It said these estimates were based on a hypothetical case of a 30-year-old who starts taking pension withdrawals in 2061...

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