View more on these topics

Call for ban on auto-enrolment consultancy charging

Anne Begg

The work and pension select committee has called for an immediate ban on members paying consultancy charges in auto-enrolment schemes.

In a report into improving governance and best practice in workplace pensions, published last week, MPs say consultancy charges could damage confidence in pension saving and auto-enrolment.

The report also calls for a ban on active member discounts as they can “significantly” reduce the amount of money available to members in retirement.

Last month HMRC confirmed consultancy charges will be subject to VAT payments.

The Government launched an urgent review of consulting charging in December and will publish a report later this month.

WPSC chair and Labour MP Dame Anne Begg says: “The plethora of costs and charges that can be applied to pension pots are not only confusing, they can seriously impact on an individual’s retirement income.

“We are particularly concerned about member-borne consultancy charges and those charges applied to deferred members – people who stop contributing to their pension scheme. Neither can be justified; both should be banned.”

The report says until a ban can be put in place, the Government and regulators should issue urgent guidance to the industry to clarify “acceptable” levels of consultancy charges.

Pensions expert Ros Altmann says: “At the moment, it is perfectly permissable for unqualified, unregulated advisers to charge auto-enrolled workers for advice that is only given to the employer. That is despite the fact the workers’ pension fund is paying for the advice. This is wrong and should be banned immediately.”

<!–
<!–
<!–
<!–
<!–

–>
–>
–>
–>
–>

Recommended

FCA estimates 48% of interest-only borrowers will have a shortfall

The Financial Conduct Authority believes around 48 per cent of borrowers with interest-only mortgages to have a shortfall when their loan matures. Moreover, the regulator expects the average shortfall to be £71,850 over the 30-year period to 2042, falling to £56,200 for those due to pay off their mortgage by 2022. The results were revealed […]

Payday lender complaints to FOS rocket 75%

The Financial Ombudsman Service says it has seen a 75 per cent year-on-year increase in complaints about payday lenders and is finding in consumers’ favour in nearly three quarters of cases. FOS says it receives 30 to 40 complaints each month and many of the cases involve the lender’s use of a continuous payment authority, […]

1

BoI borrowers push ahead with class action against rate hike

Landlords being hit with a tracker mortgage rate hike by the Bank of Ireland today are pushing ahead with a class action for damages after a “positive” legal opinion. In February, the Bank of Ireland revealed it is more than doubling the rate for 13,500 borrowers on its tracker mortgages, some 7 per cent of […]

Money-Cash-20-Note-Currency-UK-700x450.jpg

Martin Churchill: Generalist VCTs back in fashion

With the tax year behind us, I thought this would be a good time to see how VCTs fared. The overall message is that both the VCT and EIS markets had a good year, raising funds about level with the tax year 2011/12. This is in my view a very good result with the triple […]

Don’t play chicken with the Bank of Japan

By Josh Ausden, Head of Client Investment Strategy, Neptune Short-term yen strength has hurt the Neptune Japan Opportunities Fund but recent events have only added weight to our conviction that the Bank of Japan will act to ease policy, boosting multinationals’ profits and weakening the yen. In recent weeks the performance of the Japanese stockmarket […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com