The pension industry are making a “fat living” from people’s savings and should come under tougher scrutiny, MPs have said.
The work and pensions committee called for the government to take urgent action against pension funds that fail to disclose how much they charge savers, saying it is “unconvinced” that the industry will act voluntarily on providing transparent information about the costs and charges of investments.
MPs have called for providers behind the charges to face the “full force of the law”, accusing them of “misinforming, mischarging, overcharging” on the savings of pensioners. Such charges are “eroding the value of individuals’ savings,” they said.
One pension fund first reported it had £10m in management costs before being forced to revise the figure to £92m. The inquiry found “worrying evidence” that some trustees are making investment decisions without a clear understanding of the costs. A previous report on the British Steel pension scheme found that members were “shamelessly bamboozled” by advisers and unregulated introducers into signing up to ongoing adviser fees, unsuitable pension products and investments, characterised by high investment risk, high management charges and punitive exit fees.
The work and pensions committee called for the government to take urgent action against pension funds that fail to disclose how much they charge savers, saying it is “unconvinced” that the industry will act voluntarily on providing transparent information about the costs and charges of investments.
MPs have called for providers behind the charges to face the “full force of the law”, accusing them of “misinforming, mischarging, overcharging” on the savings of pensioners. Such charges are “eroding the value of individuals’ savings,” they said.
One pension fund first reported it had £10m in management costs before being forced to revise the figure to £92m. The inquiry found “worrying evidence” that some trustees are making investment decisions without a clear understanding of the costs. A previous report on the British Steel pension scheme found that members were “shamelessly bamboozled” by advisers and unregulated introducers into signing up to ongoing adviser fees, unsuitable pension products and investments, characterised by high investment risk, high management charges and punitive exit fees.
Lady Ros Altmann, a former pensions minister, compared the industry as it stands to “shoppers going into a supermarket and seeing similar-looking products on the shelves, but the prices are hidden. Displaying prices clearly for customers should be one of the most basic elements of a product sale, yet in pensions it seems to be an ‘optional extra’,” she said.
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