The charges encountered by members of defined contribution (DC) pension schemes, which ultimately reduce the size of the pot that can be converted into a retirement income in later life, have been in the spotlight this week.
Clearly, as the introduction of automatic enrolment fast approaches, rebuilding trust in the pensions industry is a decisive element in encouraging people to save more for retirement. As such, full disclosure of all charges is paramount. Part of the problem, however, is that not everybody agrees on what constitutes a charge.
Ed Miliband got the ball rolling last week, at least in the mainstream press, by arguing that many savers are being ‘ripped off’, warning that practices in parts of the industry will be seen in the same vein as the scandal currently engulfing the banking sector.
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Image: Plashing Vote