Hands off my pension: Protecting pensions from rip-off charges
Many people have conscientiously saved into a pension over the course of their working life, and the Government’s auto-enrolment policy will mean everyone in the workplace now has the opportunity to join them and start contributing to a pension. But just being in a pension scheme alone doesn’t guarantee a comfortable retirement. A substantial chunk of it can still be whittled away by rip-off consultancy fees and charges.
Last month the Government announced plans to reform the pensions market. It proposed a cap on administration fees for auto-enrolment schemes. At Which? we don’t think these plans go far enough and believe the cap should be lowered from the suggested 0.75%, to 0.5%. This seemingly small reduction could mean a difference of £40,500 in a pension fund at retirement and save consumers around £4.8 billion just over the next 10 years.
In addition we want this cap to cover all new and existing workplace pensions. We don’t want people to be penalised for the years they’ve already invested their hard-earned cash. Commission payments for auto enrolment schemes should be banned too, as well as consultancy charges for all pension schemes.
There’s also a risk that charges could be jacked up if you switch jobs. Gone are the days of a job for life. Many of us adapt our working lives, take opportunities or move jobs as our personal circumstances demand and we must not be penalised for it.
We’re pleased the Government is currently consulting on pensions but we urgently need new, minimum standards for all workplace pensions so people can be confident that they’re being enrolled into high quality, good value schemes.
We successfully campaigned for an end to consultancy charges on auto-enrolment pension schemes at the start of this year. The Government and regulators took action, and in May announced a ban on charges for auto-enrolment schemes. So we’re confident our new campaign can get further action as we demand fund managers keep their hands off our pensions.
Our new campaign has received more than 14,000 signatures, with 7,000 supporters adding their comments to explain why this issue is important to them, helping shape our response to the Government’s consultation. But there’s just one week left to get behind the campaign as the consultation closes on the 28th November.
We want to show the Government how the public feel about their pensions, and the concerns they have not only for their pension but for future generations. Please support our campaign, and share your thoughts, at www.which.co.uk/handsoff