View more on these topics

AMCs of up to 9% on occupational schemes

Some employers and scheme members are being hit with charges of up to 9 per cent on occupational plans, a Department for Work and Pensions report reveals.

The report on charging levels and structures in money-purchase schemes, published last week, shows that two trust-based occupational schemes have AMCs of between 5 per cent and 9 per cent. This is up to six times the maximum stakeholder charge.

Three schemes have AMCs of 4-5 per cent, two have AMCs of 3-4 per cent, another two have AMCs of 2-3 per cent and 12 have AMCs of 1-2 per cent.

The vast majority of contract-based schemes have an AMC of less than 1.5 per cent. The DWP found charges were paid by the employer in 42 per cent of cases while employees paid the costs in 19 per cent of schemes. In 35 per cent of cases, the scheme charge was shared.

Standard Life head of pensions policy John Lawson says: “Some employers and scheme members are paying extortionate charges. They need to find a more cost-effective alternative.”

Hargreaves Lansdown pensions analyst Laith Khalaf says: “You can see how charges on occupational schemes rack up because they need to pay trustees, investment managers, actuaries and advisers rather than buying an off-the-shelf group personal pension.”


Bank accounts

At the second hearing of the Which? Banking Commission recently, several former bank staff gave evidence of the sales culture they experienced while working for some of the biggest names in high-street banking. Following reports of the hearing published in Money Marketing,several former bank employees got in touch to tell us of similar experiences. Here, three former bank advisers talk to Lee Jones about the high-pressure sales culture they experienced when they were working for banks

The FCA’s five fixes for retirement information

The Financial Conduct Authority (FCA) has started to change the way that people will be told about their pension options. In a recent market study paper, they lay out their final proposals on the information that should be delivered to people approaching retirement and how it should look and feel. During 2015, there will be […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. An AMC’s of 9% is the market telling the regulators the “true” cost of all the regulatory impositions heaped upon them over recent years.

    What they are really saying is the regulatory costs have priced the product out of the market. To be quite frank if you applied true costs of selling any regulated product you would find that the commission earnings is dwarfed by the true cost.

    Consider this: What charge would you make to be “outlawed” from your human rights, the same rights that others have died and are defending? What charge would you make to be subjected to unlimited litigation administered by and unelected quasi judicial quango the FSA/FOS who do not grant you protection under the rule of law. If you were able to cost this and many other factors I can guarantee you the quoted 9% would not be unreasonable and that market forces are recording the true cost of UK regulation!

    This is the uninversal law of business and why the final salary pension industry is being killed off by regulations quicker than you can say Robert Maxwell!


Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm