Fresh Light to be thrown on ‘Hidden’ Pension Charges
People who pay into company “defined contribution” pension schemes will be given much more information about the cost of investing their money.
The government is amending its own Pensions Bill, so that pension providers will have to declare the investment costs they incur on behalf of pension savers.
The new rules will be published soon, to start early next year. The pension’s minister said some charges might be limited or even banned.
The minister, Steve Webb said “These are charges nobody is really sure about… with people taking money out of pensions which should be ending up in retirement income,” he added that the eventual changes required of the pension industry, part of a “full package” of reforms, would come into effect in early 2015.
To stop hidden costs racking up extra expenses in an opaque fashion, Mr Webb has now said the government will press ahead to put a cap on the annual charges that pension savers pay, when they automatically enrol into defined contribution pension schemes.