The boss of insurer Standard Life today welcomed plans to probe the charges pension providers heap onto their customers.
Chief executive David Nish said a fee cap of between 0.75% and 1% of the funds being managed would fall within the range his company already charges. He claimed that 99% of his company’s fees were below 1%.
“It’s important that we become a nation of savers,” he added. “We support anything that provides value for money for customers and will watch how the plans develop and give input where we can.”
The coalition believes people could be losing thousands of pounds because of high charges across the industry. The Office of Fair Trading estimates that there are more than 186,000 pension pots with £2.65 billion worth of assets subject to an annual charge above 1%.
“Enough is enough on charges. People need to know they are getting value for money when they save into a pension and not getting ripped off,” pensions minister Steve Webb said.
Nish’s comments came as Standard Life’s third-quarter numbers fell just short of City expectations even though group funds under management grew 9% to £237.6 billion.
He said the company is well positioned to benefit from the roll-out of auto-enrolment, which will mean all workers aged between 22 and state retirement age who earn at least £9440 a year will be enrolled into a private pension scheme selected by their employer.
The scheme will be subject to any changes made to the pension fee structure.
Some nine million Britons, which is almost a third of the workforce, will be affected and about £11 billion extra a year will be saved into workplace pensions.
Mr Nish added: “In the UK, both our corporate and retail businesses have performed well. We have assisted employers with over 100 auto-enrolment implementations and have increased the number of corporate pension customers to 1.4 million, adding 195,000 new customers.”
