Draft regulations that will place a cap on workplace pension charges have been submitted to Parliament.
Under plans first announced in March 2014, the people automatically enrolled onto a workplace scheme will have their charges capped at 0.75%.
The Department for Work and Pensions (DWP) estimates the cap will put £200 million back into savers’ pockets over the next decade.
According to the proposed regulations, from April 2015:
- a 0.75% cap will be applied to charges on all defined contribution pension schemes
- transaction fees will be the only charge exempt from this rule
- the DWP will review the cap in 2017.
Pensions Minister Steve Webb said:
“Today is an excellent day for pension savers. It is vital that workplace pension schemes are run in the interests of their members and that their hard-earned savings are not eaten away by excessive charges.
“There is an understandable buzz around what April will bring in for those retiring now, with the unprecedented pension freedoms coming in. But these reforms show we are also determined to help the pensioners of tomorrow – people working hard and saving hard for their families’ future.”