Purchasers of personal pensions are being misled about the level of hidden costs and charges, the RSA's year-long investigation into the pensions industry has found.
Seeing through the British Pension System found that 21 out of 23 providers denied there were any additional charges other than the annual management charge (AMC) and administration costs.
The report uncovers how those selling pensions fail to reveal what is charged for such items as audit and custodial costs, and other hidden costs including taxes, stock lending fees and broking commissions.
The report concludes that the enormous impact of fees, where an extra 2 percent annual charge can over the lifetime of a pension result in a halving of pension benefit, is not understood by individual consumers or by small employers.
Collective pensions provide a safer more predictable income in retirement. This report evaluates the performance of collective pensions and recommends they should become the standard in the UK.