Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Pension charge cap to be delayed for a year

Pension charge cap to be delayed for a year

Plans to cap pension charges for auto-enrolment schemes will be delayed by a year or more, according to the Financial Times.

In October the Department for Work and Pensions (DWP) proposed to cap pension charges for auto-enrolment schemes at 0.75% or 1%.

The paper, put forward by pensions minister Steve Webb (pictured), planned to implement the cap in April, when smaller firms begin staging.

However implementation will be delayed for at least a year.

It comes after the Regulatory Policy Committee (RPC) heavily criticised the DWP’s failure to conduct a satisfactory assessment of the impact of a charge cap.

The RPC, which is an independent government body, said the DWP’s impact assessment was ‘not fit for purpose’ and did ‘not adequately demonstrate’ why a charge cap was the right solution.

The consultation proposed a 1% charge cap, in line with current stakeholder products.

The third option is a two tier ‘comply or explain’ cap where there would be a standard cap of 0.75% for qualifying schemes, with a higher cap of 1% available to employers who reported to the Pensions Regulator why the scheme charges exceeded 0.75%.

It said a final cap could lie in between 1% and 0.75% depending on the responses to the consultation. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter