Personal Pension  

‘Caps could push schemes towards Nest’

The insurance partner of Deloitte UK said: “Price caps can ensure high-cost schemes cannot survive and consumers do not have their pension savings whittled away by excessive charges.

“However price caps, which will largely impact small schemes, will reduce competition for many of the newer schemes that will come into effect under auto-enrolment. This may hinder competitive forces which would drive down costs and possibly leave Nest as the only option for smaller schemes.”

Graham Vidler, director of communications and engagement for Nest, declined to comment on Mr Power’s assertions but said: “Nest has been designed specifically to help employers meet their auto-enrolment duties and we have a public service obligation to accept any employer that wants to use us.

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“One of the ways in which we help employers is through a process we call ‘delegated access’.

“This allows employers who don’t want to do the administration themselves to hand the reins of administering auto-enrolment to an adviser.”

The department for work and pensions had not responded at the time of going to press.

Adviser view

Alan Dick, principal of Glasgow-based Forty Two Wealth Management, said: “I agree with Mr Power, price caps in principle are a great idea as many schemes are expensive. Price caps are a necessary evil.”