‘Most pension schemes aren’t charging anywhere near the cap’
Former pensions minister, Steve Webb, also had concerns about an increase in the cap, which he felt might be unnecessary. He said that the current cap was not a barrier to investing in more expensive investment projects as most providers were not charging “anywhere near the price cap” and so had room to manoeuvre.
According to Government figures, the average charge for a scheme is significantly below the cap, at around 0.4%.
He said: “Most schemes aren’t charging anywhere near the charge cap, most people are on around 0.4, so to go from that to around 1% (when investing in ‘higher return investments’) would be a huge increase, so you’d have to be very confident in a good return.”
We have asked the Treasury when it plans to begin the consultation on the price cap and how long it will run for. We will update this story as soon as we know.