Work and Pensions select committee chair Anne Begg has cast doubts on Federation of Small Business claims that its new pension scheme charges will be comparable to Nest.
The FSB is developing the scheme in conjunction with Scottish Widows and IFA firm Independent Financial Service. It will be available to the body’s 200,000 members.
The FSB has not yet revealed the details of its charging structure but during a Work and Pensions select committee session last week, FSB head of policy Graeme Fisher said the scheme’s charges will be comparable to Nest’s 0.3 per cent AMC plus contribution charge.
But Begg said she understands the scheme will charge an AMC of 0.7 per cent. She said: “The difference between is huge. It does not sound a lot but it is in terms of the whole pension pot. They are not comparable and many people will not understand that.”
In response, Fisher said: “Charges and information are currently being developed but they are comparable to Nest and will be made freely available.”
FSB member and Conservative MP Brandon Lewis said that many FSB members will “not have the time or inclination” to deal with auto-enrolment and so are likely to choose the scheme.