MPs will debate pension charges next week after work and pensions select committee member Brandon Lewis secured a Parliamentary debate on the subject.
The debate will be held in Westminster Hall, next Wednesday at 2.30pm and will be an hour and a half long. No motion will be voted on and no legislation will result from the debate.
Earlier this week the committee heard from pension providers who set out their varying charges in terms of percentages. Lewis slammed the way charges are laid out saying people struggle to understand the actual cost.
Speaking to Money Marketing, Lewis says: “The cynic in me says in some case schemes make it so complicated so they can lose costs which go beyond what the consumer will accept. If these things are laid out in cash terms that will not be able to happen.
“It cannot be beyond the wit of man to have on pension statements the actual total cost so people know what amount is actually going on costs and what is being invested. It should be in cash terms and not in percentages, that is what people want to know.”
Lewis, who is Conservative MP for Great Yarmouth, says it is not about capping the charges, but making sure people are not put off by the complexity.
He says: “I am not in favour of a cap, if providers want to charge 10 per cent and they can justify it to customers then that is fine. The problem is transparency. Wealthy people use pensions because they are tax efficient and have advisers to guide them through. Middle earners save because they know it is the right thing to do. But low earners are put off partly because they just do not know what the charges are costing them.”