Association of British Insurers director general Otto Thoreson has pledged to make pension costs more clear to consumers following widespread attacks on the lack of transparency among providers.
A report published by the Royal Society of Arts last week criticised insurers for failing to disclose all costs associated with saving in a pension product.
This followed calls from Labour to increase transparency of costs and charges within the pensions industry.
In an interview with BBC Radio 4’s ‘Moneybox’ programme on Saturday, Thoreson (pictured) said: “Our members are regulated by the FSA and there is actually quite a significant amount of disclosure already.
“The problem is that disclosure was developed from a retail environment and actually needs to be looked at to make it easier for people to engage with.
“Trading costs and stamp duty were less important in the past because of the higher levels of charges generally. We should be working at how we can make those more clear to people and allow them to judge between good value and less good value.”
Speaking to Money Marketing, David Pitt-Watson – author of the RSA report – says: “We have a real gap in understanding about pension charges in the UK. We will not get the pensions market to work properly unless people understand clearly what it is they are buying.
“At the moment, the information customers need to make an informed choice is simply not available.
“People find percentages difficult. It is very clear that we could have a bank account-type statement in this country, as they have in Denmark, and it will work for any competitive provider.”
Equity Partners UK managing director Kevin Tooze says: “The industry needs to come clean on all charges that a pension fund incurs. Providers need to forget about percentages and use simple cash examples which people can actually comprehend.”