Govt plans to cap auto-enrolment pension charges at 0.75%
Speaking during the House of Commons debate on the Pensions Bill Webb said a consultation on how to deal with the “scourge of excessive charges” would be launched tomorrow.
He added the 0.75% cap would be one of a range of options outlined by the Department for Work and Pensions.
Eleswhere, Webb said Labour’s amendment which would have seen annuity brokerage used as standard in auto-enrolment schemes was “too prescriptive”
He said: “The amendment here is too narrow, too prescriptive.
“But there is a big agenda on decumulation [the process of converting pension savings to retirement income], it is not just about annuities. There is a big agenda on decumulation.”
Webb said work surrounding decumulation was ongoing.
Labour’s shadow pensions minister Gregg McClymont said auto-enrolment absolutely had to work effectively for the ten million people who would be auto-enroled.
“The minister has gone for a hard fast wind up of the second state pension. If you are going to engage in a very quick wind up, a very fast move to a flat-rate state pension but biggest losers are likely to be people in the private sector, the lower paid.
“These very same people who will be auto-enroled are the same people who are losing out in the longer term in the state pension.
“The first thing the pensions minster should have done when he took office is to work out how ten million people who are auto-enroled will get value for money.”