CE0 of Thomsons Online Benefits responds to announcement of pension charges cap
Michael Whitfield, CE0 of Thomsons Online Benefits, said in response, “Bold claims that the new charge cap will shift £200 million from the profits of the pensions industry into the pockets of savers. Unfortunately, the very value of capping the fees charged by pension providers at 0.75% is questionable. Setting aside the negative impact of inflation on any longer-term savings, there is the reality that the annual management charge of many pensions is in fact lower than 0.75% – bringing a danger that costs could actually be increased to the capped level. Above and beyond this, it places huge pressure on an already under-resourced adviser community, just when their professional consultancy is needed the most.
“Focusing on the charge cap itself also means that the crux of the pensions crisis will remain unresolved: we cannot accept an apathetic, disengaged majority, comfortable with auto-enrolment and & lsquo;vanilla’ pension schemes that will simply fail to see them through their later years.
“After undeniably positive steps in the recent Budget, placing the emphasis on education and the need for everyone to have the know-how to make the right financial decisions, we’re back with a focus on mandatory enforcements that detract from the bigger picture reform we actually need. If now is the time to put people first, then why not build on the free impartial, face-to-face advise recently offered to certain retirees? A sustained focus on educating the masses will really let pension members of all generations save for themselves.”