Which? launches a new campaign calling on Pensions Minister Steve Webb MP to do more to protect people's retirement funds.
Last week 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.
Which? believes the new cap on auto-enrolment pensions should be lowered from the proposed 0.75%, to 0.5% and be extended 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.
Which? is asking consumers to pledge their support for the Hands Off My Pension campaign.
Which? executive director, 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.