The government’s proposed 0.75% cap on pension charges could be delayed for a year until April 2015.
The introduction of a cap was originally intended for April 2014, which aimed to protect millions of employees from high fees, after being auto-enrolled into their organisation’s pension scheme.
A Department for Work and Pensions (DWP) consultation on a pension charges cap closed on 28 November last year and was split into three options, with a cap on charges above 0.75%.
The delay could mean implementation will go beyond this government and into the next Parliament.
In December, the Regulatory Policy Committee at the Department for Business ruled that the DWP’s impact assessment on a pension charges cap was ‘not fit for purpose’.
A DWP spokesperson said: “This is an important and complex consultation that requires our proper consideration to ensure we get it right and we will confirm a publication date in due course.”
Gregg McClymont, shadow pensions minister, added: “Capping pension charges would help families in Britain that are facing a cost-of-living crisis. Labour called for a cap on pension charges last year, but regrettably the government failed to act and now ministers seem to be in full scale retreat.
“The government must explain why they are kicking ‘rip-off’ pension charges into the long grass. Is it chaos and disarray within government, or have ministers caved into the vested interests of the fund managers and pension giants that are accused of slicing and dicing the savings of hard-pressed British savers?”
