Shadow pensions minister Gregg McClymont has warned Labour will force the pensions industry to improve disclosure of costs and charges if the party is elected to power in 2015.
In an interview with the Financial Times, McClymont says savers risk being “ripped off” if providers fail to tell them the costs associated with pension saving.
He says: “If the pension providers don’t start telling people what they are really charging them, savers risk being ripped off. If they haven’t started doing this by the time we get into government, we will force them to.”
The industry has already taken steps to improve the disclosure of costs and charges.
In January, the Association of British Insurers proposed a set of new standards designed to give savers clearer information on how much money is deducted from their pension pot each year in costs and charges.
So far 14 of the UK’s largest pension providers have signed up to the standards, which must be implemented by the summer of 2014 for schemes newly established for auto-enrolment. Older workplace schemes have been handed an extended deadline of 31 December 2015.
The Government has also set its sights on pension charges, with a consultation on setting a charge cap for auto-enrolment schemes due to be published in the autumn following an investigation by the Office of Fair Trading.