Pension holders to be told the truth about fees

BRITISH pension fees are too high and too complex, according to the National Association of Pension Funds (NAPF).  Industry leaders will announce plans for a new code of conduct today, which will mean consumers are told exactly how much of their pensions will be lost. 
 
Joanne Segars, the chief executive of the NAPF, said: "We know that one of the problems we have at the moment is a lack of trust in the financial services industry. So if we could start to act in a slightly more honest and open way, then that should help give people more confidence in pensions – and start to exert downward pressure on fees and charges."
 
The government will introduce a new system next year that will automatically enrol millions of workers in company pension schemes, but there are fears that high fees will cause workers to opt out.
 
Pensions minister Steve Webb told The Daily Telegraph that the government will take steps to avoid that scenario. "We are seriously considering capping charges for people who will be automatically enrolled and we have just amended the Pensions Bill in order to extend our power to do so".
 
A report by leading pension fund manager David Pitt-Watson revealed that someone saving £1,000 a year throughout their working lives would retire on an inflation-protected pension worth £16,080 a year, but British pension funds typically reduce the payout to £9,900 annually. 
 
Read a full report at The Daily Telegraph.