The move comes after pensions minister Steve Webb said the government was considering pushing for a 75 basis point charge on pension schemes. Which? said thousands of pounds could be saved if the government brought down charges on schemes such as the National Employment Savings Trust.
Highlighting research from the department of work and pensions, Which? claimed that up to £40,500 could be saved for the average pension by reducing charges for a 46-year investment term.
The campaign, Hands Off My Pension, wants the government to set the proposed charge cap at 0.5 per cent, roll out the cap to cover all new and existing workplace pensions, and ban hikes on annual management charges after changing jobs.
Tom McPhail, head of pensions research for Bristol-based Hargreaves Lansdown, said: “Which? is right to highlight the importance of low charges. However a simple charge cap of 0.5 per cent would make Nest a rip-off pension which is obviously ridiculous as it is a good scheme set up on competitive terms.”
Andrew Oliver, principal of Kent-based IFA Andrew Oliver, said: “What’s needed is a complete rethink, not a bit of tinkering with the charges. Even Nest with 1.8 per cent initial and 0.3 per cent AMC is outside the pension minister’s thoughts on capping charges at 0.75 per cent. We need a pension revolution because evolution is never going to do it.”