Average earners could gain up to £100k in new pension charges reform
04 February 2015
From April 2015 workers who are automatically enrolled into a workplace pension will see their charges capped at 0.75%.
Minister for Pensions, Steve Webb, has set out today how from April 2015, people automatically enrolled into a workplace pension will see their charges capped at 0.75%, unless they have chosen a more expensive option.
For an average earner currently paying into a fund with a charge of 1.5%, this new cap could save them around £100,000 over the course of their working life. Over the next decade, the default fund charge cap will transfer around £200 million from the pensions industry to savers.
The details are set out in draft regulations which have been laid before Parliament. The Government has also published its response to the consultation Better workplace pensions: Putting savers’ interests first.
The Financial Conduct Authority will also be making corresponding rules to control charges and introducing Independent Governance Committees for workplace personal pension schemes from April 2015.
Their rules, together with these regulations, will ensure that savers are protected regardless of the type of workplace pension they are saving into.