The Work and Pensions Committee has launched an inquiry into whether enough is being done by those in the pension industry to provide transparency around charges, investment strategy and performance.
The investigation follows on from the committee’s report published in April, in response to an earlier inquiry launched in September 2017, which proposed measures to facilitate a pension freedoms market that works better for scheme members.
Announced on 3 August 2018, this new investigation aims to follow on from this work, and to take into account a consultation paper published by the Financial Conduct Authority (FCA) in March 2018.
The inquiry will be taking written submissions from all interested parties until 3 September 2018, and aims to discover whether individuals are able to get value for money for their pension savings, understand the charges being applied, are aware of the impact of costs on retirement outcomes, can see how their money is being invested, receive valuable advice from impartial financial advisers, and are engaged enough to use the information they are provided.
The committee is asking a number of questions of its contributors, including whether higher cost providers do truly provide higher performance, how savers might be encouraged to engage, whether there are barriers to consumers going elsewhere if they are unhappy with their provider, and whether financial advisers are providing value for money.
This inquiry has been launched in response to the rapid rise in enrolment in workplace pension schemes, which has created millions of new savers and a sharp increase in the demand for drawdown products and transfers out of defined benefit pension schemes, coupled with concerns about low levels of consumer engagement and understanding.