“We welcome this announcement and the focus on value for money, member outcomes and the importance of fee transparency,” said Neil Walton, head of the UK institutional business development group at Schroders.
“The new rules make sure all the costs in pension schemes are published and the government will then consider whether these should also be included in the new charge cap. This transparency is important to ensure an effectively functioning market place.”
However, Neil Carberry, director for employment and skills at employers’ group CBI said capping fees at this level was unwise, especially as schemes will have to provide advice to every member following changes announced in the UK Budget.
“It is also disappointing to see that the government has decided to ban active member discounts, which means long-serving staff will no longer be rewarded.”
Gina Miller, founder of SCM Private and the True and Fair Campaign stated that if the UK government is to get an ‘iron grip on pension charges’ it requires more than a 0.75% cap on annual management fees for auto-enrolment schemes.
“All transaction costs and hidden fees need to be included if savers are to finally get transparency on what they are paying to save into a pension. For two years the True & Fair Campaign has been calling for the pension and investment management industry to disclose 100% of all costs, including hidden costs and fees. Yet Steve Webb today reminded us that the OFT has found as many as 18 different charges are levied by pension providers which remain ‘hidden or complex’.”
“While the government’s commitment to end this rip-off and include hidden costs and fees within a pensions cap is welcome, waiting until 2017 to include transaction costs and other fees is not.”