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Pension fees cap plan


30/10/2013

By Daniel Hunter

New government proposals will see management fees charged by pension providers capped between 0.75% and 1%.

The Treasury is consulting on its plans to cap fees, which it says could save people tens of thousands of pounds.

Some older schemes set up more than a decade ago have been found to charge up to 2.3% a year in management fees.

On Tuesday, pensions minister Steve Webb said the government would launch a "full frontal assault" on pension fees.

Pensions minister Steve Webb told BBC Radio 5 Live Breakfast that the move was just the start of a much broader review into pensions charges.

"We do have powers to cap a much wider range of charges. The document today looks at banning something called active member discounts. That means when you leave a firm they jack your charges up - we don't think this is right so we will probably ban those," e said.

When asked if charges should be capped lower than 0.75%, the minister said the cap should not be so low that it discouraged providers. He said the cap needed to be "at a level where there's competition in the market".

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