Under-secretary of state for pensions Richard Harrington has backed the Financial Conduct Authority’s plans to tackle pension charges.
During a parliamentary debate yesterday (9 January), Mr Harrington said he was committed to implementing all the FCA’s recommendations on ways to improve price competition in the asset management industry.
In November, the FCA proposed a “significant package of remedies” for UK asset managers after the interim findings of its probe into the industry suggested price competition was weak.
The long-awaited findings of the market study, which the City watchdog launched in November 2015, found “limited price competition” for actively managed funds.
The FCA said that, on average, such costs were not justified by higher returns.
The regulator went on to warn that fund objectives were not always clear, while portfolio performance was not always reported against an appropriate benchmark.
Also during the round of questions, Mr Harrington came under fire for the government’s recent Ways to Save campaign.
Scottish National Party MP Ian Blackford said the Ways to save in 2017 leaflet recently published by the Treasury mentioned the Junior Isa, the Help to Buy Isa, premium bonds, cash and stocks and shares Isas and the new lifetime Isa.
Mr Blackford said: “That is an absolute disgrace and it confirms my fears that the government have downgraded the role of pensions and are using the gimmick of Isas to distract attention from pensionable savings.
“Does the minister agree that pensionable saving is the best form of saving for retirement? Will he establish a pensions and savings commission to ensure that dignity in retirement is promoted and protected?”
In response, Mr Harrington said he totally disagreed with Mr Blackford’s analysis of the importance that the government place on pensions.
Mr Harrington said: “A lot of effort goes into communicating with people, on television and elsewhere, about auto-enrolment.
“The auto-enrolment of so many people has been one of the great successes of this government and of the coalition, and I hope that that continues.”