Pension fees cap to give £1bn boost to savers
Royal London has indicated that a cap on pensions charges could benefit savers by £1bn – five times the £200m ministers predicted. The 0.75% a year cap on charges, which takes effect in April 2015, will apply to workplace pensions linked to the stock market and will allow savers’ funds to grow more quickly to the detriment of pension providers. Justin Modray, founder of Candid Financial Advice, said: “Insurers are paying the price for treating customers poorly over several decades.” However, other experts suggest employers and shareholders could be asked to pick up the difference through extra charges that will be passed on to employees through lower pay rises and reduced dividends for shareholders.
Source: The Morning Account