Which? response to OFT announcement on work-place pensions
Which? executive director Richard Lloyd said:
“Unfortunately the Office of Fair Trading’s recommendations don’t go far enough to prevent billions of pounds of consumers’ money from languishing in poor value schemes. People need to see a difference today and be confident in the pension scheme that they’re automatically enrolled into, so that they’re encouraged to save for their retirement.
“The Government must go further and set high-quality minimum standards for all workplace pensions as soon as possible, including a cap on all charges.”
Background
- In March 2013, Which? found 35% of people who have opted out of auto-enrolment, 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. [Survey of 891 UK working adults (18-65) who earn enough to be eligible for auto-enrolment].
- Which? supports the ban on penalty charges for people who switch jobs. These fees can significantly and unfairly erode the value of people’s pension pots. Which? research in 2011 found that some companies were charging 0.5%-0.7% Annual Management Charge for active members but once the person leaves then the charges could double to 1.2%-1.5%.
- 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. In May this year the Government announced a ban on charges for auto-enrolment schemes
Statement