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Cap on pension profiteers welcome but 'not enough'

Ministers announced plans to slap a 0.75 per cent cap on pension scheme charges

Ministers announced plans yesterday to slap a 0.75 per cent cap on pension scheme charges that help line the pockets of industry bosses.

Pensions Minister Steve Webb said the change, effective from April 2015, would transfer an estimated £195 million from pension industry profits into savers' accounts.

But many felt that the cap wouldn't "fix the problem."

National Pensioners Convention national officer Neil Duncan-Jordan told the Star that the proposed cap is a token measure.

"The government has clearly been forced to do this because it knows that the private pension industry doesn't work," he said.

"It creams a huge amount of profit."

The announcement came merely a week after Chancellor George Osborne announced changes to retirement pots' management as part of the Budget.

Mr Duncan-Jordan said that these measures too resulted from the government's agenda of transferring financial risks onto the individual.

The Treasury changes are intended to boost confidence in retirement saving, but with the retirement age rising and general living costs soaring, groups like the NPC believe this is a "big gamble" for people on average wages.

TUC general secretary Francis O'Grady added: "The Chancellor tore up the system we use to turn pension pots into retirement income last week without putting anything positive in its place.

"That will come at a cost and we still do not know who will pay once the Chancellor's initial funding runs out."

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