Savers will be offered pensions “with expensive, and confusing fees”, following a dramatic climbdown by the pensions minister, Steve Webb, over charges.
Mr Webb had wanted, from April, to cap charges levied by workplace-pension schemes. However, following noisy lobbying by the pensions industry he has decided to put his planned cap on ice at least until 2015.
“Steve Webb has faced frenzied opposition from the industry’s lobbying machine ever since he announced his plan to stamp out high fees on auto-enrolment pensions. The lobbyists have now got their way,” John Fox, managing director of Liberty Sipp said.
With no cap on charges he questions whether workers should allow themselves to be auto-enrolled into their company pension scheme: “The chance to start a pension through work will be convenient – but with no cap on the pension fees, for many it might not be good value,” he said.
Gina Miller of the True and Fair campaign said the delay – although unwelcome –is an opportunity to get to grips with fees: “I would urge the Government to use this pause to strengthen the proposals so that any caps include all costs and fees,” she said.