Pension savers more interested in value than charges


New research, led by Ruston Smith, and carried out by Ignition House, shows that pension savers want to know what their pension is costing them but they want to know the value they are getting even more!

Building on the work to implement simpler pension statements, which will soon be made law by the Government, this research was commissioned to address one of the big unanswered questions in the development of simpler statements – whether and how to display costs and charges.

Currently there is no requirement to include the consistent disclosure of the costs and charges that pension savers pay to their provider for running their pension scheme. This is a significant gap in the information provided to savers.  So far, there has been no agreed approach about whether this information should be shown and the best way to do it on annual pension statements across all trust and contract based schemes.

To tackle the subject head on, Ruston led a cross-industry initiative, backed by independent research, to ask savers what they wanted and expected to see, and importantly how they would like it presented.

The conclusions were clear:

  • Members are more interested in the value of their pension savings than the charges they pay
  • The majority of members weren’t aware that they were paying charges but, equally, they were not particularly surprised to see them
  • Members want pension providers and schemes to show and explain the charges they pay simply and consistently on all the annual pension statements they receive – which they say will build trust
  • If providers and schemes couldn’t provide individual members charges, members would think they were untrustworthy – transparency leads to trust

You can here Ruston and Janette talk about these findings on Friday at 2pm

Register here

If you would like me to mail you a copy of the research, drop me a line at

The research

The method and content of the research was agreed by the Pensions Regulator, DWP, the FCA and industry representatives to make sure that it was carried out independently and robustly – so it can be used to make a real difference. The conclusions of the research have been passed to the DWP as they consider how to use and apply the findings.

On launching the research findings, Ruston Smith, said:

“Not surprisingly, it’s the value of members’ savings at retirement that matters most – the money in their retirement pot.

“But members also want to see the costs that are charged and taken out of their savings on all their annual pension statements – presented in a consistent, clear and simple way, in pounds and pence.

“This research asked the industry’s customers how they want the charges they actually pay to be shown on all the annual pension statements they receive.  Listening to pension savers, the industry’s customers, is critical in delivering what works best for them.

“There’s no current requirement to show the amount that each member pays, in charges, consistently on all trust and contract based annual pension statements.  This research provides conclusive evidence that members expect to see those charges on their pension statements, but also tells us how they want them expressed and presented.”


What happened?

This new initiative led by Ruston Smith set out to better understand the information that members want to see on their statements, with input from TPR, DWP, FCA and industry stakeholders.

The research by Janette Weir at Ignition House fills that evidence gap and has been presented to the Government for consideration.

The research by Ignition House covered over 1,000 members of DC schemes, using a quantitative and qualitative research process.  The research showed that providers and schemes need to do more to show and explain the charges they pay simply and consistently on all annual pension statements.

It also revealed that just 13% of members surveyed read and understood their existing annual pension statements. The work done to design the Simpler Annual Statement was based on existing regulation and, at the time, the simple and consistent disclosure of members’ costs and charges was called out as an important area for future work.

Here’s what Janette and Ruston found members  said


About the statement

“My eyes were immediately drawn to the bubbles and the simple breakdowns.”

“The way that’s laid out, that’s foolproof. Everything’s there.”


About value

“I would be less worried about the cost and I’d be more worried about what you get back. That is your retirement money for the rest of your life and is actually really super important. So I would actually not care as much about the cost more about what you are getting out of it.”


About making every penny count

“I think transparency is important.  I think whoever’s got a pension we want to know exactly what we are paying. Especially as my money at the moment, it’s not easily come by, is it? And we want every penny to count.”


  On freedom of choice

“You know, no one’s expecting something from nothing. You don’t expect to do work and not get paid. Somebody has decided to take the money, spend time investing people’s pension money. Of course, that’s going to cost. But just tell us what it’s going to cost. And then it’s freedom of choice. If I want to pay 1.5% or if I want to pay 0.5%, that’s up to me.”


 On transparency of charges

“Today I was shocked because I didn’t know that we pay charges for a pension. And as much as I clearly have not done enough research as I should have done on my pension, I don’t feel I’m alone. So at which point you’d be a bit, hang on a minute, it’s sort of been back-doored in there. It probably was somewhere in between all the jargon, but I think it needs to be more transparent. At the end of the day, people should know what they’re paying. And see if there are any alternatives to that because you get loads of people asking you to switch your pension to them.”



On paying for a service

“They’re charging you for the fact that they’re investing your money. So they’re trying to make a return for you on the money. And I guess that’s one of the challenges. So they’re managing it, they’re keeping it safe. They’re charging for the fact that they’re sending you statements that they’re dealing with your queries. I don’t know what else, but I mean, there’s going to be lots and lots of fees in the same way as a bank might well charge you a fee or any organization might charge you a fee. They’re doing things for you at the end of the day, it’s a service.”


 On leaving the charges “blank”

“I’d say prior to this session, I think that if it wasn’t on the statement, you would think they’re not charging you. You’d probably be a bit naïve if they leave it blank. They shouldn’t be able to do that. You would think it would almost be illegal not to state that.”


On fairness and the law

“I think that actually needs to be made law and part of their legislation about all pensions. Because it’s not fair on someone that can’t see all that information, who is making an ill-informed choice on which way to go. I think they should all be made to do it. I know some businesses may struggle because they haven’t got the facilities, but unfortunately, that’s business, isn’t it?”


 On comparing pay-outs

“Sometimes you do get more for your money if it’s invested in better things. But you’d need to really see a difference in their payouts to other companies to pay more. If someone was saying, I’ll charge you a hundred pounds a year where this company is saying £211 then show me why you’re worth the £211, why your investments are any better than this company that’s charging a hundred. Or you’d go with the hundred company, wouldn’t you? So at the end of the day, it’s based on proof.”

The Heatmap

For those familiar with how single pension statements are laid out, here is how people engaged with what they saw

They were asked this question :

Please read the example annual pension statement and click on any information in the purple boxthat catches your eye. For each click, a box will appear. You can then select whether you had a positive ornegative reaction to seeing this information and enter any comments you have. When you have finished
clicking the tick button. You can select as many parts of statement as you like.


Green reactions show “likes”, yellow “neutral” and  red “dislike”


by far the greatest area of interest is the circles showing ‘How much money is in your pension plan’, as these are the “figures that matter”. Survey respondents commented that this statement was clear, easy to understand, and liked the “big bold colours”.

The money in/out layout also appealed and received comments such as “everything is clearly itemised and easy to understand”


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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