The Office of Fair Trading will criticise pension providers for increasing management charges on retirement funds left dormant by employees who have moved jobs.
The higher charges for these “deferred members” can wipe almost a third off the value of the savings pot they build up by the time they reach retirement.
Clive Maxwell, the OFT chief executive, is also expected to argue that the annual fee charged by fund managers on workplace pensions nationwide should be no more than 1 per cent – in line with suggestions made earlier this week by Steve Webb, the pensions minister .
This could put pressure on ministers to explain why Nest, a scheme established by the Government to provide pensions for staff of smaller companies, takes a 1.8 per cent cut on contributions.
OK, charges on pensions might be “too high”, whatever that means. But there’s going to be a fascinating part to the inevitable arguments about this.
For I would wager considerable sums that the people who will complain about such charges, who will proffer up their newly minted solutions (ie, Mssrs. Hines and Murphy) will also be those who generally insist that Stamp Duty, indeed a financial transactions tax, are wondrous things that definitely should be higher.
Without their noting that the people who actually bear the incidence of such taxes being those pensioners who suffer lower pensions as a result.
Either high charges leading to low pensions are a scandal which we should solve or they’re not. What the charges are is something of a secondary consideration, don’t you think?