View more on these topics

Pension Regulator warns charges cap will deter new entrants

The Pensions Regulator has warned against a cap on pension charges, saying it would limit new entrants into the market.

The Government has said it is willing to look at capping pension charges if the industry cannot come up with a plan to drive down costs. But at a work and pensions select committee hearing last week, TPR chief executive Bill Galvin warned against the move, calling it “a blunt tool” which would could reduce choice at the top end of the market.

He said: “A world with very strict regulation confining charging structures might limit opportunities for people to bring propositions to market to suit a variety of customers. With auto-enrolment, we need to make sure we accommodate propositions that appeal to well paid and well informed workforces as well as the median employee.”

The National Association of Pension Funds is working on a code of practice on charging structures. Galvin suggested having a framework with more common charges set out in a standard way with any additional charges listed separately. “That would be a big step forward,” he said.

Asked by committee member and Conservative MP Oliver Heald, whether it was possible to arrive at “a transparent and comparable” charging structure, Galvin said the variety of pension schemes meant that was a challenge. He added: “I believe it is possible to get to a better place than we are now, where people can make decisions better.” The committee is running an inquiry into auto-enrolment, which begins for larger firms in October. Last December, committee member and Conservative MP Brandon Lewis, who also warns against a cap, called for the charges to be set out in cash terms, one of the options being considered by the NAPF for its code of practice.

The Government can cap pension charges under a power in the 2008 Pensions Act.


Trade bodies must back up complaints

The Treasury select committee is calling on trade bodies to be more vocal about problems they see with regulation and to justify any proposed alternatives in terms of benefits to consumers. In its report into the accountability of the Financial Conduct Authority, the TSC says industry has complained “a great deal” about current regulatory practice […]


MM Leader: What next for Aifa?

It was not the biggest surprise in the world to see Aifa director general Stephen Gay quit after just over a year in charge to join the relative tranquillity of the Association of British Insurers. Aifa announced a £200,000 deficit late last year and Gay’s tenure has been spent implementing costcutting measures alongside grappling with […]


News and expert analysis straight to your inbox

Sign up


There are 3 comments at the moment, we would love to hear your opinion too.

  1. Strangulation by Regulation 19th January 2012 at 5:24 pm

    “if the industry cannot come up with a plan to drive down costs”

    Dear Sir or Madam, you are responsible for driving up the cost of regulation, please have a think about this.

  2. I agree with the previous comment and also think Mr Galvin should reconsider his evidence. He seems to be saying that better investments should be available for the well-paid and the well-off, but not for the average/typical or low income saver.

    That is exactly the disregard for many savers’ needs which is all too prevalent among bankers and others in the financial dis-services industry, surely?

  3. Mark H (Not Hoban!) 20th January 2012 at 10:41 am

    George Kirrin | 20 Jan 2012 9:43 am

    I agree with you entirely George.

    So when are people in powerful positions going to wake-up and understand that an investment should be available to those on £15/20k pa not just those on £100k+ !!!

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm