Pension schemes will now be required to publish the fees charged to members for the first time, due to a new proposal by the Department for Work and Pensions.
Members of workplace pension schemes will be given access to information concerning where their money is invested and how much they are being charged.
The proposals could see pension scheme members receive an annual benefit statement that spells out the percentage figure that is levied on their pension savings.
The move to push providers to publish charges online will allow scheme members to better compare between their own scheme and others available.
David Gauke, the secretary of state for work and pensions, says that the move will start to ‘address a fundamental imbalance that exists in the pensions industry.’
He adds: 'By giving people the tools to better understand their options and compare value for money, I believe we are creating a generation of smarter, more informed savers.’
The government hopes the changes will provide greater transparency, allowing pension scheme members and pension scheme trustees to compare the value for money they are receiving for their scheme compared to others.
‘For too long savers have been in the dark about where their pension is invested, what they are paying for, and why they are paying it.,’ Gauke said.
‘I want people to have a strong sense of personal ownership over their pension savings. These proposals do just that and will open the industry.’
According to the government this increased transparency will lead to ‘better market outcomes,’ in turn potentially benefiting up to 10 million people
The proposals, still in consultation, will start to be implemented in 2019 at the earliest, when the first batch of pension scheme costs will be published online.
The charges would first apply to the 2500 largest defined contribution schemes, but could expand to include defined benefit pension or final salary pension plans.
Providers who fail to comply will be fined up to £50,000.
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