Charges remain hugely variable and generally high. They can take up to a third of the money you might accumulate in your pension pot over 25 years, says a survey in this month's Money Management magazine. The average charge reduction is closer to a fifth, and the figures have barely changed since last year. In some cases, a Personal Equity Plan might produce better overall returns even though pensions carry more tax breaks.
Money Management names Eurolife as the highest charger for a personal pension taking monthly contributions. The cheapest is Equitable Life. For someone saving pounds 200 a month for 25 years the difference could translate - very roughly and assuming the same investment performance - into a pension of pounds 18,000 a year from Equitable and pounds 14,000 from Eurolife.
Higher charges are fine, though, so long as that company invests your money significantly better than a cheaper rival.
Money Management gives a number of companies "five stars" for being best buys. These have achieved good overall performance and have low charges. For people paying a monthly premium it names Equitable Life, Norwich Union, Prudential, Scottish Amicable, Rothschild Asset Management, Professional Life and Winterthur. For people investing a lump sum it names AXA Equity & Law, National Mutual, Norwich Union, Sun Alliance and Professional Life.
But these tips should only be a starting point; good past performance will not necessarily continue, and charges can rise once you have signed up. And the named "best buys" assume certain levels of premium. You should also check that the pension plan is flexible - for example, what happens if you want to stop paying monthly premiums? - that the company is financially strong, and that the service is good; pension companies have an appalling record for administration and incomprehensible paperwork.