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 Volatility is back, Europe's future & Ethical's key moment

Volatility is back, Europe's future & Ethical's key moment

This week’s episode of Investment Pulse takes a look at European prospects, FTSE volatility and whether public pressure is about to provide a push for ethical investment

Play Volatility spike: How ETFs can soften the blow

Volatility spike: How ETFs can soften the blow

ETFGI’s Deborah Fuhr discusses the role of ETFs in client portfolios during volatile market conditions

Play Winter market warmers, the post QE world and timing the Fed

Winter market warmers, the post QE world and timing the Fed

This week’s episode of Investment Pulse looks at the winding down of quantitative easing, whether to try and time a US Federal Reserve rate rise and if strong seasonal performers can reverse recent market slumps

Wealth Manager on Twitter