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Labour cautious over retrospective consultancy charging ban

Shadow pensions minister Gregg McClymont has urged caution as policymakers eye a retrospective ban on consultancy charging and commission associated with group schemes.

The Government has banned consultancy charging since May when it first announced its plans but it is also considering retrospective action on charges levied between January and May.

The Department for Work and Pensions has been unable to estimate how many schemes could be affected but said the numbers are “limited”.

The Office of Fair Trading has also called for a ban on “built-in” commissions associated with auto-enrolment schemes which experts warn could lead to all trail being axed.

Speaking at a fringe event at the Labour conference this week, McClymont said: “As a general principle I would be cautious about retrospective action but in these cases we need to see what the numbers are. The Government is looking at the issue of auto-enrolment schemes set up with these charges so we have to see what the scale of the problem is and balance it against the cautious use of retrospection.”

McClymont plans include removing Nest restrictions more quickly than 2017, full disclosure of all costs and charges, minimum standards for auto-enrolment schemes, working towards an industry standard 50 basis points charge and independent trustees acting on behalf of every saver.

He said: “This cuts across all political parties because if you are a free marketeer you would not like this market because it is not free, transparent or competitive. As a social democrat I want to see markets working effectively in the public interest, and political ideologies coming together on this issue.”

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