Pensions: Draw-down Charges

Lord German Excerpts

Tuesday 9th June 2015 Lords Chamber

[Lord Freud]

We are going to see how the market develops. It has been going for only two months, and if it looks appropriate, as I just said, we will introduce a cap on charges. I know that my new noble friend, the Minister for Pensions, absolutely agrees with that. The Prime Minister has also promised that we will keep a close eye on this.

[Lord German (LD)]

My Lords, at all stages between the pension saver’s pocket, the investment and back again, there are hidden charges and fees—admin charges, investment charges, platform charges, transaction charges and advice costs, to name just a few. Does the noble Lord agree that there should be transparency for pension savers, and that they should know what hidden fees and charges are attracted to the money that comes from their pocket?

[Lord Freud]

My Lords, I imagine that quite a lot of noble Lords in the House today will remember the amendment we made to ensure that we would get transparency of charging, and we are working on that process. That is for accumulation funds, but there is no reason why we should not introduce the same thing for decumulation funds, if that is appropriate.