Workplace pension scheme charges will be capped at 0.75%, Pensions Minister Steve Webb announced yesterday.
The changes will transfer around £200 million pension industry profits to savers' pockets over the next 10 years, Mr Webb claimed, as he vowed to "put charges in a vice" and tighten the pressure each year.
The cap will start in April 2015 and will apply to employer schemes people are automatically put in by their workplace, MPs heard. Mr Webb has previously explained that a 0.75% cap aims to protect people who do not take too much of an interest in their pension.
In a statement to the Commons yesterday, Mr Webb claimed that the coalition would be the first Government to get an "iron grip" on pension charges.
He told MPs: "We're going to put charges in a vice and we will tighten the pressure year after year."
Turning to a cap on scheme charges, Mr Webb said: "Over the next 10 years the new charge cap will transfer around £200 million from the profits of the pensions industry to the pockets of savers."
Shadow minister Gregg McClymont said: "The Government has belatedly accepted that the market in pensions, as in energy, is not working for consumers.
"We welcome this historic change of Conservative and Liberal heart - it is a retreat from free market dogma."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article