Pension providers face a roasting from Pensions Minister Steve Webb in the New Year over sky-high pension charges.
Following a lengthy investigation by the Independent Project Board and the Financial Conduct Authority (FCA), around £25.8 billion of pension funds face charges of 1% or more, which Webb says are too high.
In disgust, he has summoned the financial companies – most of Britain’s most well-known pension firms – to a meeting to explain how they plan to cut the charges to give retirement savers a better deal.
Name and shame policy
Webb has promised that he will name and shame firms who try to wriggle out of lowering their charges, and if necessary, bring in a new law to make them comply with his wishes.
Most of the pensions involved were taken out before 2001.
Although pension firms are taking at least a 1% slice off the £25.8 billion, half the cash has a fee of 1.5%, £8 billion faces charges of 2%, while £900 million is subject to charges of more than 3%.
Webb said: “These fees are shocking and one of the pension industry’s guilty secrets.
“I expect the firms involved to explain how they plan to resolve this in the New Year. If they can’t or won’t, I will change the law and name them in public so everyone knows who they are.
“I will sit down with them one at a time and challenge them to explain their charges.”
Warnings about bogus advisers
- Cash Finance Direct
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
