Older pensions can sometimes carry higher charges, outdated features or less flexibility than newer arrangements. With the Financial Conduct Authority warning that some savers in legacy pensions may be receiving poorer value, it could be a good time to check whether your retirement savings are still on track – and whether any valuable benefits are worth protecting.
Is your old pension still working as hard as it should?
The Financial Conduct Authority (FCA) has warned that some older personal pensions may not be delivering the same value as newer pension arrangements, potentially leaving savers worse off over the long term.
Its latest review, published on 2 July, examined older insurance-based pension and savings products that are no longer open to new customers. While the FCA found examples of good practice across the market, it also identified concerns that some people could be paying higher charges or receiving less value than those invested in more modern alternatives.
Why is the FCA concerned?
Many people have built up pensions over the course of their careers, often through multiple employers or policies taken out many years ago. Some of these older pensions sit within products that were designed decades ago and may not offer the same features, flexibility or value available today.
The FCA found that around half of the pension policies reviewed were held in legacy or closed products. In some cases, providers struggled to fully assess whether these plans represented fair value because information held on older systems was incomplete or difficult to access.
The long-term impact of pension charges
While higher charges may not seem significant at first glance, even small differences can have a substantial effect over time.
Just as investment growth compounds year after year, so do costs. A slightly higher annual charge can gradually reduce the value of your pension over decades of saving. By the time you come to access your retirement funds, the difference between an older, higher-cost pension and a more competitive modern plan could be considerable.
That doesn’t automatically mean that every older pension should be replaced. Some legacy plans contain valuable guarantees, special features or benefits that may be worth preserving. However, it does highlight the importance of understanding exactly what you have and whether it still meets your needs.
Positive signs across the pension industry
The FCA’s review also highlighted examples of pension providers taking proactive steps to improve outcomes for customers.
Some firms have reduced or capped charges on older products, simplified investment options and helped customers move to better-value arrangements where appropriate. Others have found ways to retain valuable guarantees while still giving clients access to lower-cost solutions.
The regulator wants to see these improvements adopted more widely across the industry and has made it clear that providers remain responsible for ensuring customers receive fair value, regardless of the age of the product or limitations within their systems.
What does this mean for your pension?
If you have a personal pension that was set up many years ago, or you’re not entirely sure where all your pensions are held, now could be a good time to review them.
An older pension isn’t necessarily a bad pension, but without a review it’s difficult to know whether you’re paying more than you need to, missing out on better options, or holding valuable benefits that should be protected.
How Dafferns Wealth can help?
At Dafferns Wealth, we regularly help clients review existing pension arrangements, understand what they have and assess whether their plans remain suitable for their current circumstances and future goals.
Whether you have a single pension or several plans accumulated over the years, professional advice can help you make informed decisions and avoid costly mistakes.
If you’d like to understand whether your pension still represents good value, speak to one of our advisers today. Contact Dafferns Wealth to arrange a pension review and take confidence that your retirement savings are working as hard as they can for you.
FAQ
What is a legacy pension?
A legacy pension is usually an older pension arrangement that is no longer available to new savers. These plans may have been set up many years ago and may not offer the same charges, features or flexibility as more modern pension arrangements.
Does this mean older pensions are bad?
Not necessarily. Some older pensions may include valuable guarantees, protected benefits or special terms that could be worth keeping. The key is to understand what you have before making any decisions.
Why can pension charges make such a difference?
Pension charges are often deducted automatically from your pension pot. Even small differences in annual charges can add up over time and reduce the amount available when you retire, especially when your money is invested for many years. MoneyHelper explains that defined contribution pension providers usually take charges directly from your pension pot, rather than billing you separately.
Should I transfer an older pension to a newer plan?
Not without professional advice. Transferring could reduce charges or improve flexibility, but it may also mean giving up valuable benefits or guarantees. A pension review can help you weigh up the pros and cons.
What should I check on an older pension?
Useful areas to review include charges, investment choice, performance, retirement options, exit penalties, guarantees and whether the plan still suits your current needs and future goals.
What if I have more than one pension?
Many people build up several pensions during their working life. Reviewing them together can help you see the full picture, understand whether any plans overlap and decide whether simplifying your arrangements could be helpful.
Sources & further reading
Pension firms must do more for customers in older pensions and fund savings | FCA
Unit-linked pensions and savings: Multi-firm review of Consumer Duty price and value practices | FCA
Firms must do more for customers in older pensions, says FCA | The Independent
Pension scheme fees and charges | MoneyHelper
Disclaimer: information is based on publicly available data and government announcements at the time of writing (August 2026) and may be subject to change. It is for information only and is not advice. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.