We posed as a pensions consultant, approaching five different pension providers to set up auto-enrolment pensions for fake companies.
We asked the pension providers to deduct our consultancy charges from these pension pots, which we knew would rip off any employees unfortunate enough to be enrolled in them.
The highest charge we submitted would’ve had employees paying £450 from their pension pot in their first year, and 7.5% of all contributions into their pension pot for five years.
We found that none of the pension providers objected to deducting these consultancy charges, even though they would’ve had a severe detrimental financial effect on those enrolled in the pension.
Shocked by our findings, we lobbied the government for a ban on these consultancy charges. Pensions minister Steve Webb announced a ban, recognising the real risk they pose of eating away at people’s hard earned money.