Commenting on the Department for Work and Pensions call for evidence as part of their consultation on standards in automatic enrolment pension schemes,
Which? executive director, Richard Lloyd, said:
“We need to see new, higher standards for workplace pensions as soon as possible to restore trust in pensions and help ensure people are financially secure in retirement.
“Our research has found far too often people opt out of pension schemes because they are concerned about the quality of the scheme, or they don’t trust the pension industry to look after their money.
“Minimum standards will increase people’s confidence that they are being automatically enrolled into high quality and good value schemes.”
1. Which? also wants to see the new standards include a ban on penalty charges which on people face when they move jobs (known as deferred member penalties). We’ve found that annual charges could double when people move jobs, having a significant impact on the value of a pension pot. In April 2013, the Work and Pensions Select Committee supported our call for a ban on these charges.
2. Which? has previously successfully campaigned for an end to consultancy charges on auto-enrolment pension schemes. In January 2013, we wrote to the Department of Work and Pensions, the Financial Conduct Authority and the Pensions Regulator. We also highlighted the issue in Which? magazine in April 2013 and in May this year, the Government announced a ban on charges for auto-enrolment schemes.
3. In March 2013, Which? surveyed 891 UK working adults (18-65) who earn enough to be eligible for auto-enrolment and found:
– 35% of people who have opted out, or say they will opt out, do so because they do not trust the pension industry to look after their money, and 22% because they are concerned about the quality of the scheme.