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What impact do fees have upon your pension?

A report this week has cast a very dark shadow on the UK pension industry with accusations that UK pension arrangements are being hammered by fees which can in some cases add up to hundreds of thousands of pounds before retirement is taken. Some experts in the pension industry believe that for example someone saving £200 a month for their pension could suffer fees in excess of £200,000 over a 40 year period. In some cases this can lead to a final pension of around half that which similar savings patterns would attract in Europe.

This is the often hidden face of the UK pension industry although it has to be said that all fees and charges are detailed in pension fund agreements. We all need to take more care when looking towards saving for our future because ultimately every pound that we pay in charges will lead to a reduction in our final pension income. It is also worth noting that it is not simply the deduction of fees which can impact upon your future pension payments but the very fact that £1 taken out of your scheme today is £1 less than you have to reinvest for potentially the next 40 years. This is the real damage which is being done to your pension arrangement!

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