Personal PensionMar 27 2014

Nest charge cap reprieve despite initial fee inclusion

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In response to the government announcement, Tim Jones, Nest chief executive, said: “In terms of charges, the government has now confirmed its benchmark for good value by setting a cap on how much schemes can charge.

“These arrangements will provide welcome clarity for consumers and employers on what good value means, and in helping them to compare schemes.

“We also welcome the moves to provide greater transparency on the other charges made by pension schemes, particularly in relation to investment, as these can often eat into a member’s pot. Nest provides a very good value scheme at low charge, with very low transactional costs.

“We’re pleased that the government response makes clear that Nest meets the criteria for good value.”

In 2017, the government will re-examine the level of the cap and consider whether some or all transaction costs should be included within it.

The government also confirmed again that consultancy charges will be banned in qualifying schemes from April 2015 - and that the ban would apply retrospectively.

Mr Webb said: “Over the next ten years, the new charge cap will transfer £200m from the profits of the pensions industry to the pockets of savers. Pension savers have paid too much, for too long. It is time to put the saver first.

“The pensions revolution does not stop at automatic enrolment. People need to have confidence that putting money into good pension schemes where their money will be looked after.

“The measures we are announcing today will make sure that we are seen as world leaders in transparency and value for money.”