Dame Anne Begg MP, Chair of the Work and Pensions Select Committee, today welcomed the Government’s intention to ban member-borne consultancy charging in workplace pension schemes. Dame Anne also welcomed Government plans to publish a consultation on proposals for introducing a cap on pension scheme charges.
Commenting on the Government’s announcement, Dame Anne said:
"I am pleased that the Government has acted on my Committee’s recommendation and announced its intention to ban consultancy charging for auto-enrolment pension schemes.
Consultancy charges can seriously impact on an individual’s retirement income. They have the potential not only to undermine confidence in auto-enrolment, but in pension saving more generally.
Under auto-enrolment, millions of people, including many low earners, will be brought into pension saving for the very first time. Central to the policy’s success is that people feel they are getting good value for money. A ban on consultancy charges is a significant step towards achieving this.
Consultancy charges are only one element within the plethora of costs and charges that can be applied to pension schemes, however. Whilst the trend towards lower charges is welcome, the potential for consumer detriment where high charges persist remains serious.
Our Report called on the Government to act on charges without hesitation if it becomes apparent that people are at risk of detriment. I am, therefore, pleased to see the Government taking action in this area and welcome its plans for a consultation on introducing a charge cap."