Which? has launched a new campaign calling on Pensions Minister Steve Webb MP to do more to protect people’s retirement funds.
Earlier this month the Government announced plans to reform the pensions market, proposing a cap on administration fees for auto-enrolment schemes.
Which? Is calling on the Government to lower the level of the proposed new cap, extend the proposals to more schemes and ban other unfair charges.
The aim of the campaign is to lower the new cap on auto-enrolment pensions from the proposed 0.75%, to 0.5% and extend it to cover all new and existing workplace schemes.
This seemingly small reduction could mean a difference of £40,500 in your pension fund at retirement and save consumers around £4.8 billion just over the next 10 years.
To protect people’s retirement funds, Which? is launching the Hands Off My Pension campaign calling for the Government to:
- Set the proposed charge cap at 0.5%
- Roll out the cap to cover all new and existing workplace pensions
- Ban hikes on annual management charges when switching job
Executive director of Which? Richard Lloyd, said: ‘Millions of people are currently paying in to rip off pensions, but many might not realise so much of their money is being taken in fees until it’s too late.
‘While we strongly support the direction of the Government’s plans there is an urgent need for better minimum standards for all workplace pensions so people can be confident that they are being enrolled into high quality, good value schemes.
‘With consumers being squeezed by the rising cost of living, there is no room for rip-off pension schemes in the workplace.
‘In a separate Which? investigation we found a third (35%) of people who have opted out of auto-enrolment, or say they will opt out, do so because they do not trust the pension industry to look after their money, and one in five (22%) because they are concerned about the quality of the scheme.
‘The latest Which? Consumer Insight Tracker showed that just six in ten (62%) people in full time work are saving into a pension – that’s less than half (46%) of all non-retired people – and only a quarter (26%) are confident they will have enough money to live on in retirement.’
Jane Vass, Head of Public Policy at Age UK, said:
‘We are pleased that the Government is looking at the issue of pension charges, as everybody who is automatically enrolled into a workplace pension needs to be sure that they are getting a good deal.
‘We fully support the Which? campaign which is calling for Government to be more ambitious and set the charge cap at a lower level than it is currently proposing.’
Which? need your help by 28 November. Support the campaign and share your views via: www.which.co.uk/handsoff