I agree We use cookies on this website to help us provide the best user experience. By browsing this site you agree to their use - more information is available here.

Barnett Waddingham
0333 11 11 222

Pension charges cap announcement

Published by Malcolm McLean on

Reacting to today’s news that the government is to cap pension charges at 0.75% from April 2015, and that from April 2016 schemes will be prohibited from taking money from peoples’ pension schemes to pay for sales commission, Malcolm McLean says:

“The government has gone for the toughest of the three options that was originally put forward for use as a potential charge cap.

“On the plus side, at least the decision that has now been made to introduce a 0.75% charge cap (excluding transaction charges from April 2015), will remove some of the uncertainty employers currently planning their A-E arrangements are experiencing.

“On the negative side, however, a 0.75% cap will obviously limit the ability of employers to choose a scheme that may well have higher charges but delivers far better outcomes for their staff.

“On the commission ban, this will be seen as a huge blow to advisers, which some estimates suggest could cost them £150 million and 1000 jobs.

“Of the information currently available it is not clear whether schemes that have already been auto-enrolled will have to apply this cap, and of course there is still uncertainty as to what the 2017 review will bring.”

 

Follow Malcolm on Twitter

About the author

  • Malcolm McLean

    Malcolm is Barnett Waddingham’s in-house ‘pensions expert’ and is one of the firm’s leading media spokespeople.

    View Biography

Updates delivered to you

Stay ahead with our latest comment, expert insight and event details.