But there is an alternative for anyone prepared to do their own homework. All it takes is a telephone and a free evening to look at the documents you have been sent. You might well save a small fortune in charges.
Buying direct is a growing market. Now Tesco Personal Finance Life has joined the list of those offering pensions over the telephone. It is test- marketing its product, which starts from pounds 30 a month at 20 supermarkets.
Like Tesco, many of the direct pension providers are newcomers to the world of finance. They include well-known names such as Virgin, Marks & Spencer and Direct Line. A number are run by investment trust management groups such as Foreign & Colonial, Flemings and Edinburgh Fund Managers. Others are subsidiaries of traditional companies such as Eagle Star, Equitable Life and Standard Life. Some of the direct providers will even offer you advice, but only about their own products. Most just send you the information.
So far, direct pension providers account for well under 10 per cent of the market. But as people become more aware of them, their share will increase.
"Our customers know what they want," says Steve Roberts, head of Eagle Star Direct. "They want good value for money, good service and not to be bothered by sales people."
The best direct plans offer low-cost, flexible policies that meet the lifestyle needs of today. They allow premiums to be increased, lowered or even stopped at will without penalty. Even better, they do not carry the high charges of their longer-established competitors. A traditional personal pension can pay the best part of the first two years' contributions in premiums to the adviser who sold it, while the charges are much lower with direct providers. Expect as a rule to pay an initial charge of well under 5 per cent and an annual one of less than 2 per cent. A few companies, such as Virgin Direct, make a small monthly admin charge, but most don't.
To help you find out more about direct pensions, the Independent and the Independent on Sunday have a new free guide sponsored by Eagle Star Direct. For a copy call 0800 776666.
q Contacts: Tesco , 0845 845 5555; Virgin Direct, 0345 900 900; Direct Line, 0845 3000 333; Foreign & Colonial, 0181 880 8120; Flemings, 0800 413176; Edinburgh Fund Managers, 0800 838993; Eagle Star Direct, 01242 258556; Marks & Spencer, 0800 363432; Equitable Life, 01296 385200.Reuse content