You are here: Home - Retirement - Retiring now - News -

Govt must protect retirees from ‘rip off’ drawdown charges – Labour

Written by:
Labour has urged the government to ensure none of the 320,000 savers expected to take advantage of pension freedoms are exposed to “rip off charges”.
Govt must protect retirees from ‘rip off’ drawdown charges – Labour

The opposition said hundreds of thousands of people are expected to look for annuity replacement products from April next year, exposing them to potentially high charges.

From April next year people aged over 55 will be able to access their pension pots as and when they wish. Many will opt for drawdown contracts, seeing part of their pot remain invested.

Labour said the government had not factored the risks associated with income drawdown into its plans. It suggested a charge cap may be necessary to prevent investors losing out.

Shadow pensions minister Gregg McClymont said: “Labour welcomed the new pension flexibilities announced in the Budget, but we are concerned that the government has not thought through the risks of rip-off charges being taken from the savings of hardworking people.”

The BBC reports Labour fears income drawdown contracts could see savers pay out almost 30 per cent of the value of a £30,000 pension pot in fees, if existing structures on drawdown products were applied.

The Financial Conduct Authority is due to publish new guidelines for companies selling pension-related financial products soon, the report added.

Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Warning: scammers using GDPR emails to steal your data

With the introduction of the General Data Protection Regulation (GDPR) this week, fraudsters are jumping on th...

New best buy 1-year bond pays 2%

Gatehouse Bank has raised the rate on its 1-year fixed-term deposit (FTD) account to 2%, pushing it to the top...

Shhhh….‘niche’ lenders offer mortgages up to 6 times borrowers’ income

Some smaller lenders have quietly increased income multiples used to calculate the maximum mortgage they can o...

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

Tesco expected to post significant write-offs

Tesco is predicted to unveil the biggest loss in its 100-year history, according to analysts.

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
FTSE 100: This morning’s risers and fallers

UK stocks opened broadly flat on Monday with markets pausing for breath after hitting a two-month high last week.