By Claire West
Commenting on plans announced on Tuesday by Pensions Minister Steve Webb MP to introduce a 0.75 per cent cap on auto-enrolment pension charges, TUC General Secretary Frances O’Grady said:
“We welcome the Minister’s hint that there will be a 0.75 per cent cap on auto-enrolment pension charges. This would be a good initial step and provide reassurance that savers are not being ripped off.
“It will be just as important to make sure that there are no charges hidden away in the management of scheme investments, no charges going as commission to consultants and no hidden penalties for savers who are no longer contributing to the scheme — the so-called active member discounts. In the longer term we want the charge cap to be reduced to 0.5 per cent — the level that good schemes like NEST already charge.
“This looks very much as if the government has not only listened to union and consumer calls for a charge cap and better consumer protection, but is prepared to act. With living standards so tightly squeezed it is vital that every pension pound saved works as hard as possible. Today, Steve Webb is helping bring that about.”