Conservative MP Harriett Baldwin has hit out at Nest for charging customers a 1.8 per cent upfront fee and is calling for a flat rate to be used instead.
Speaking at a Social Market Foundation fringe event at the Conservative conference, Baldwin said she opposes a pension charges cap, currently under consideration by the Government.
Baldwin is parliamentary private secretary to employment minister Mark Hoban and often speaks on pensions issues for the Conservatives.
Nest operates a dual charging structure, with members paying a 1.8 per cent contribution fee on new investments alongside a 0.3 per cent annual management charge. The upfront charge is a temporary measure to recoup the taxpayer loans Nest has used for its set up costs.
Baldwin said: “Having an upfront charge, which you don’t find in most major markets, is something I criticise Nest for. It’s much better to have a flat charge and I still think 0.5 per cent is awfully high but I know there is a lot of administration.
”We need more competition to try and get those fees down really low. This is an industry which will see an extra £11bn flowing into its coffers so let’s hope it sparks a lot of competition and a lot of transparency around low charges.”