Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/money/article/a650230
Pension providers agree to make charges clearer
Pension providers have signed up to a new code promising to make the charges on company pension schemes clearer.
by Michelle McGagh on Jan 11, 2013 at 17:24
Big insurance companies have signed up to new set of disclosure rules to make pension charges more transparent.
The Association of British Insurers (ABI) has set out rules to ensure straightforward disclosure of workplace pension charges, which tend to be confusing and difficult to compare with other schemes.
The charges agreement, which has so far been signed by 15 ABI members, will be implemented in the summer of 2014 for new schemes established under auto-enrolment. This is the new government programme requiring employers to set up pension schemes and encouraging their workers to sign up.
All other workplace pension schemes will be bound by the disclosure rules from 31 December 2013.
The ABI and its members will produce a common definition of what charges have to be disclosed at the outset to pension scheme members by the summer.
The agreement will require disclosure of:
- Total charges at the outset, to a standard definition, across all workplace schemes, including any entry or exit charges
- Total charges taken in the previous year, expressed in pounds to an exact of a rounded up figure
- Previous year’s investment transaction costs
Stephen Gay, director of life, savings and protection at the ABI, said the agreement would provide employees ‘with greater understanding and confidence in the value of saving for their financial needs in later life’.
He added: ‘It is imperative that savers have complete confidence that the industry is open and transparent with them.’
The agreement has been welcomed by pensions minister Steve Webb.
He said: ‘Charges really matter – small differences can have a big impact on a pension pot over time. Automatic-enrolment makes it all the more important that people have access to schemes which offer both transparent and value for money charges,’ he said.
The pension providers who have signed up to the agreement so far are; Aegon, Aviva, AXA, B&CE, Co-operative Insurance, Friends Life, Legal & General, Lloyds Banking Group, LV=, MetLife, Prudential, Royal London, Scottish Life, Standard Life and Zurich.
To find out more about pension charges, read these guides from The Lolly:
More about this:
More from us
- Q&A: how will projection rate changes affect my pension?
- Charges for Nest pension scheme could fall further
- High-charging pension schemes to be 'named and shamed'
- The truth about the pension fund charges 'scandal'
- Q&A: pension charges explained
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.
Latest from Investment Basics
by Daniel Grote on Jul 31, 2015 at 16:51