Waveney MP Peter Aldous today welcomes Government reforms to pension charges designed to help people who have worked hard and saved for their retirement.

 

Financial Secretary to the Treasury Sajid Javid MP announced reforms to:

 

While the average charge on new pension schemes set up in 2012 is around 0.51 per cent the Office of Fair Trading estimates that there are over 186,000 pension pots with £2.65 billion assets subject to an annual charge of above 1 per cent. In the case of someone who saves throughout their working life (46 years at £100 per month), they could end up losing almost £170,000 with a 1 per cent charge, and over £230,000 with a 1.5 per cent charge.

 

This also means that the same individual could end up having considerably more money in their pot with a lower charge – an additional £66,000 at retirement with a 1 per cent charge, and an extra £100,000 with a 0.75 per cent charge, compared to a 1.5 per cent charge.

 

Peter Aldous commented:

 

“A cap on pension charges is great news for hardworking people in the Waveney area who are doing the right thing and saving for retirement. I very much welcome the reforms which will see people getting more value for money from their pension.”

 

The Department for Work and Pension is currently consulting on the best way of increasing transparency to make it easier for employers to compare schemes by asking for the industry and the public’s view on how best to design a cap that protects savings.