Labour shadow Work and Pensions Secretary Rachel Reeves has written to Prime Minister David Cameron asking whether the Government has abandoned plans to cap auto-enrolment charges, the FT reports.
Reeves is pressing Downing Street over the issue after Money Marketing revealed policymakers are considering pushing the reform beyond the May 2015 general election because it is “too complicated”.
In a letter to the Prime Minister, Reeves says: “Any climb down by Government on capping rip off pension fees and charges would cost savers millions of pounds of their hard-earned retirement income.
“Reports that the Treasury and the DWP are ‘in conflict’ over a cap on pensions fees are extremely unsettling at a time when savers are losing their hard earned income.”
Pensions minister Steve Webb first revealed proposals to cap the annual management charge for automatic enrolment default funds at between 0.75 per cent and 1 per cent in October.
The cap was originally due to be implemented in April this year but was subsequently delayed until April 2015 “at the earliest” to give businesses more time to prepare for the change.
A DWP spokesman told Money Marketing last week: “We will publish our response to the consultation in due course.
“This is about more than just a cap – we will be responding on a wide range of issues, including governance, scheme quality and transparency.”