A clampdown on excessive early exit charges and stronger powers for the pensions regulator were among key announcements in today’s Queen’s Speech.
These measures form part of a new Pensions Bill, which will seek to provide better protections for people in multi-employer pension schemes (aka Master Trusts).
Master Trusts have been in the spotlight recently as concerns have been voiced over the regulation and governance of some these schemes, which have increased in popularity with the roll out of auto-enrolment.
There have been calls for tougher rules to ensure that people's pensions savings are adequately protected in robust schemes. The new Pensions Bill will seek to do just that.
There are also plans to extend the cap on early exit fees to cover trust-based schemes, but it’s not yet known what this cap will be.
Besides these announcements, there will also be a new pensions guidance body to help people navigate their options around pensions, bringing together The Pensions Advisory Service and Pension Wise.
We’ll be keeping an eye on the developments of the Pensions Bill as part of our call for Better Pensions. If you think more needs to be done to improve pensions for savers then back our campaign today.
Following concerns that some pension companies are not giving their customers full flexibility over how they access their savings, it's good that the Government is looking to strengthen savers' existing rights to transfer their pension to a provider who will.
A consultation to be launched next month will include proposals to put a cap on high exit fees imposed on savers, which is seen as one of the major barriers preventing people from transferring their pension easily between providers.
Which? executive director, Richard Lloyd, said:
'The Government must act to allow people to switch pension providers without being stung by excessive fees if they will not offer the new freedoms.
'The Government must also work with the regulator to ensure products offer value for money, and consider what further reforms are needed to make the market truly work for consumers, including a charge cap on default drawdown products.'
The Government has committed to greater transparency on hidden pension charges in a win for our Hands off my Pension campaign.
We lobbied the Government for a ban on consultancy charges for work place pensions and won.