You are here: Home - Retirement - Retirement planning - News -

New rules for savers with small pension pots

0
Written by: Emma Lunn
11/11/2021
Plans to protect small pension pots from being eroded by charges will be introduced next year in a move which the government says ‘puts savers’ interests first.

The Department for Work and Pensions (DWP) set out the rules which will introduce a threshold at which pensions providers will no longer be able to charge a flat fee to savers.

The rules mean pension savings invested in the default funds of schemes used for auto-enrolment with a value of £100 or less will be exempt from paying flat fees from April next year.

Guy Opperman, minister for pensions, said: “We all know what a success automatic enrolment has been in getting more people saving into private pensions – with over 10 million employees paying into a workplace pension since 2012.

“But for some, particularly those who regularly take on short-term work and change jobs frequently, there is a greater chance that they will be automatically enrolled into new workplace pensions a number of times, building up a collection of deferred small pots.

“Removing flat fees on pension savings worth less than £100 will provide a boost to hundreds of thousands of people and help them enjoy the retirement they deserve.”

The introduction of the threshold – known as the ‘de minimis’ – will complement plans to introduce pensions dashboards, which will allow individuals to keep track of their small pension pots more easily, helping them to better plan for retirement.

The DWP first announced proposals to ban flat fees on small pension pots earlier this year.

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.

How to get 5% interest without tying up your savings for years

You don't have to lock your money away to get an above-average return on your savings.
How to get 5% interest without tying up your savings for years

130 million old £1 coins still out there: what to do if you have one

An estimated 131 million old round £1 coins have yet to be returned to the Royal Mint, nearly three years afte...
130 million old £1 coins still out there: what to do if you have one

Have your Premium Bonds numbers been drawn this July?

Two lucky Premium Bonds holders have scooped the life-changing £1m jackpot. Is it you?
Have your Premium Bonds numbers been drawn this July?

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...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

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.

Money Tips of the Week