£9000 Pension Worth Nothing

A man who saved for 11 years into his pension has been told it is now worth nothing. The Edinburgh newsagent had put-away £8,740 in the 1990s and early 2000s, but has now been told the entire sum will have been eaten away by “management fees” by the time he reaches the age of 65.

ThisIsMoney reports

“It turned out that years of high charges had eaten away most of his savings… His £8,740 pot was worth around £2,268 and getting smaller by the day. Friends Life was deducting an astonishing £400 a year for management and ‘service’ fees… The charges were so high that the insurer admitted his pot would be worth nothing by his 65th birthday… When David saw a ‘£0.00’ future pension estimate in the documents the company sent him, he tried to withdraw everything… But under a clause in the contract, Friends Life barred David from cashing in his pension for another seven years… He was locked into the shoddy deal until his ‘retirement date’ — June 2024 — which was determined when he signed up in 1992… In a final blow, David couldn’t even switch to a cheaper plan that would leave some money left.”