Transparency on pension changes in the UK
An increase in transparency surrounding pension charges is a welcome development, but consumer group Which? suggests it is not enough to completely end schemes that aim to rip off customers.
MP Steve Webb has announced the government will be cracking down on hidden pension charges in a bid to improve choices for consumers. An increase in transparency can only be a good thing for people who are hoping to find the right pension plan for their retirement but it will not entirely solve an on-going problem.
Rip-off pension schemes
Richard Lloyd, the executive director of Which?, released a statement that said the government’s pledge to crack down on hidden pension charges was a good start but that it was not a complete solution. He said: “However this alone will not be enough to end rip-off schemes as consumers are often automatically enrolled by their employer and are unable to shop around.”
“We also need to see a cap on charges of 0.5 per cent, to cover all new and existing workplace pension schemes, which could save consumers around £4.8 billion just over the next 10 years.”
Many people are tied into the pension schemes offered by their employers and will therefore have no ability to react to any information offered by the crack down on hidden changes. Therefore, the executive director of Which? backs a call for further changes.
According to the Daily Mail, a probe by the Office of Fair Trading identified 18 separate transaction costs that fund managers are concealing from customers. These hidden charges could have a significant impact on the amount of money workers are able to save for their retirement.
The Which? “Hands off my pension” campaign
The campaign, which was launched in November 2013, has attracted 15,000 signatures and over 7,000 comments. These have been presented to the Pension Minister. The campaign calls for the government to set the proposed charge cap to 0.5 per cent and to roll this cap out to cover all new and existing workplace pension schemes. It also asks for the government to ban hikes on annual management charges when employees switch jobs.
Plans to cap pension charges have hit problems, however, with Money Marketing reporting that the government is considering postposing changes until after the May 2015 general election. This delay is being considered as the plans have been dubbed “too complicated” for the government to push ahead with changes before then.
However, changes are welcomed by many companies in the insurance industry. According to a report in Capital Bay, a spokesman for the Association of British Insurers said: “The pensions industry welcomes the idea of increased transparency on charges and we have been working hard to ensure that there is meaningful disclosure.”
“We know that costs of workplace pensions coming in now are falling, but we are looking at earlier, legacy schemes to see whether anything can be done.”
For up to date information about any changes to pension policy or new regulations that could affect your payments, check the government’s Department for Work and Pensions.
Latest posts by Silversurfer's Editor (see all)
- Are ‘female equality’ and ‘feminism’ the same thing? - May 22, 2018
- Step Aboard - May 21, 2018
- In 1961, Hull did something extraordinary - May 21, 2018
- Time to make ‘living the dream’ a reality - May 21, 2018
- Win a wonderful holiday for two to three iconic Italian cities! - May 21, 2018
Leave a Comment!
Community Terms & Conditions
These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.
You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.
be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.
Contributions must not:
contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
Nurturing a safe environment
Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.
We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!