Former Chancellor Lord Lawson says pension funds would find it “all too easy” to get around a charge cap as he presses for full transparency of costs.
Speaking to Money Marketing, the Conservative peer says he will be calling for more clarity on charges in the Pensions Bill which returns to the House of Lords on 24 February.
Pensions minister Steve Webb is consulting on introducing a charge cap but has delayed its introduction by 12 months until at least April 2015.
The Government has already rejected amendments tabled by shadow pensions minster Gregg McClymont calling for full transparency of costs and charges.
Lord Lawson, who sat on the parliamentary commission on banking standards, joins Tory MPs David Mowat and Nigel Evans in pushing for full transparency, as well as work and pensions select committee chair Anne Begg.
He says: “A cap has merit in theory, but in practice I strongly suspect that pension funds would find it all too easy to incur costs which conveniently fall outside the cap.
“That is why I attach so much importance to full transparency, which needs to be prescribed by law.”
The peer was Chancellor in 1988 when the Government allowed contracting out of Serps to boost the private pensions market.
The Pensions Bill will scrap contracting out and introduce a single tier state pension of £144 a week at today’s prices.
He says: “The decision to end it now is essentially part of the automatic enrolment initiative, which – so far as I can recall – was not something we considered at the time. There is clearly a case in principle for auto-enrolment, and we shall have to see how it works out in practice.”