Advisers have attacked Labour leader Ed Miliband’s ‘blunt instrument’ proposal to introduce an annual cap on pension charges.
In an open session with the public at the Labour party conference on Saturday, Miliband pledged to introduce a “strict cap” of 1 per cent on annual pension fees.
Miliband said: “What has been happening is while you were saving, the company which was supposed to be helping you, the company you trusted, has actually been taking thousands of pounds out in hidden fees and charges.
“If we win the next election, we will make sure that no pension company can take too much out of your pension. A strict cap on pension fees.”
He described the measure as the “first shots in the all-out attack I want to launch on the way the rules of our economy now appear to be stacked against you”.
Hargreaves Lansdown head of advice Danny Cox says: “Ed Miliband is barking up the wrong tree on this. Price caps are blunt instruments and the market is already pushing costs and charges down for investors.”
AWD Chase de Vere head of communications Patrick Connolly says: “Pension caps have been tried in the past and have not worked and I am not convinced it would be the right approach now.”
In July, the Labour leader pledged to tackle the “massive, massive issue” of high charges.
At the time Miliband was widely criticised by the pensions industry for “scaremongering” while pensions minister Steve Webb accused him of attempting to “stir up cheap headlines”.