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27/03/2014
Pension Schemes To Deliver Value For Money - Webb
Tough new measures announced by Pensions Minister Steve Webb today will ensure pension schemes deliver value for money for savers.
They will end rip-off charges and ban hidden costs, helping people build up the best retirement income possible from their savings.
From April 2015 a 0.75% cap on charges will be introduced for the default funds of all qualifying schemes.
Over the next 10 years, the government estimates that an extra £195 million of pension contributions will turn into pension savings, as part of a fairer society, rather than being swallowed up by unnecessary costs and charges.
An individual earning £20,000 would save around £35,500 over their lifetime if they saved in a scheme with a 0.75% charge compared to a 1% charge.
The government has also set out equivalent caps for schemes with combination charge structures.
Mr Webb said: "Through the new measures, this government will be the first to get an iron grip on pension charges. We are going to put charges in a vice; and we will tighten the pressure, year-after-year.
"Over the next 10 years, the new charge cap will transfer £200 million from the profits of the pensions industry to the pockets of savers. Pension savers have paid too much, for too long. It is time to put the saver first.
"To build a stronger economy by 2018, 10 million workers will have been automatically enrolled into pension saving."
(CD)
They will end rip-off charges and ban hidden costs, helping people build up the best retirement income possible from their savings.
From April 2015 a 0.75% cap on charges will be introduced for the default funds of all qualifying schemes.
Over the next 10 years, the government estimates that an extra £195 million of pension contributions will turn into pension savings, as part of a fairer society, rather than being swallowed up by unnecessary costs and charges.
An individual earning £20,000 would save around £35,500 over their lifetime if they saved in a scheme with a 0.75% charge compared to a 1% charge.
The government has also set out equivalent caps for schemes with combination charge structures.
Mr Webb said: "Through the new measures, this government will be the first to get an iron grip on pension charges. We are going to put charges in a vice; and we will tighten the pressure, year-after-year.
"Over the next 10 years, the new charge cap will transfer £200 million from the profits of the pensions industry to the pockets of savers. Pension savers have paid too much, for too long. It is time to put the saver first.
"To build a stronger economy by 2018, 10 million workers will have been automatically enrolled into pension saving."
(CD)
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