How savers lost £7bn a year to the currency rigging scandal Savers were left out of pocket because around half of all the pension money in Britain is invested in shares in overseas stock markets, such Apple in America or Renault in France. Due to the complex way that fund managers buy shares in other countries, savers were very susceptible to the manipulation of exchange prices, currency firm New Change FX said. It calculated that around £300 a year was being wiped off each of the 27 million policies held in Britain. Andy Woolmer, managing director of New Change, said many of the fund managers controlling the assets completely unaware of the rip-off. He explained that most of the costs were incurred "in the background." When fund managers buy foreign shares, they need to convert British pounds into the appropriate denomination, whether dollars, euros, yen or another currency. Most funds will hold these shares for a long time, trading infrequently. However, fund managers also buy a type of foreign exchange "insurance," Mr Woolmer said, as investing abroad is particularly risky. For example, if the value of the dollar collapsed overnight, each $1 of Apple shares would convert back into fewer pounds if customers wanted to cash in their savings. So fund managers bought "hedging" contracts that would offset any losses caused by sudden movements in the market. Mr Woolmer said two-thirds of all the foreign shares in British pensions were "hedged," which meant around £7.5 trillion of "background" foreign currency trades were carried out each year. Banks should have charged between 0.01 per cent and 0.02 per cent on each trade to cover their costs and make a small profit, he said. That would have removed around £28 from each pension policy in Britain, which he said was reasonable, with the total cost standing at £754 million. However, Mr Woolmer said bankers in fact collected nearer 0.11 per cent, equal to £308 from every saver. That put the total bill at £8.3 billion - which meant more than £7.5 billion had been wiped off pensions in secret.