Pension fees could deter consumers from saving
British workers could be put off saving for their future in the National Employment Savings Trust (NEST) because of the upfront fees charged by the Trust, a pensions expert has claimed.
The Department for Work and Pensions announced the 2% fee on NEST investments earlier this week.
Ros Altmann, pensions advisor, said the 2% upfront fee, which NEST is charging to cover its set up costs, will deter many savers from taking advantage of the fund.
“Obviously it is going to take away quite a bit of their savings upfront and it does seem a lot of money to lose before you even start getting the benefits of saving,” Altmann said.
“If the government wants people to save, it needs to help encourage them better and taking 2% upfront is probably not the best encouragement they could provide.”
She added that the charges are unfair because they will eventually be removed and will not apply to savers joining NEST at a later date.