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Life offices concerned at prospect of charge-capping

Standard Life is concerned that the Government may look at imposing charge caps on group personal pensions to prevent employees losing out by saving in these schemes instead of personal accounts.

Standard Life head of pensions policy John Lawson says the firm has had calls from consultancy firms asking in-depth questions about its GPP operating costs.

Which? has been putting pressure on the Department for Work & Pensions to make sure employers that opt to provide qualifying GPP schemes rather than personal accounts will offer similarly low charges.

Which? principal policy adviser Dominic Lindley says: “We have said to the DWP that it has to make sure these qualifying schemes are of significant quality, which includes low charges. From the consumer’s point of view, I do not see anything wrong with providers having to reduce prices but we are not arguing for a specific charge cap.”

Lawson says: “The DWP seems to be wanting to set our profit margin for us rather than leaving it to competition.”

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