Hidden fees and charges on pensions will be revealed by pension companies following amendments made to the Pensions Bill, according to consumer group Which?.
Minister for Pensions Steve Webb announced that the Coalition Government will bring forward measures requiring that transaction charges in pension schemes are made transparent.
The transparency of costs and charges related to pensions is fundamental to good governance of pension schemes, the Government had indicated, as well as permitting easier comparison for consumers.
Which? has long called for pension charges to be capped at a rate of 0.5%, lower than the 0.75% which may be applied.
Which? Executive Director Richard Lloyd responded to the transparency announcement positively, stating that it was good that the Government was cracking down on hidden charges to help consumers get better value from their pensions.
However, Lloyd warned that greater transparency alone would not be sufficient to tackle rip-off schemes and reiterated the call for a cap of 0.5% on pension charges that would be applicable to all existing and new workplace pension schemes.
Such a cap would save consumers £4.8bn over the next 10 years, he asserted.
The Coalition has opted against introducing a charge cap prior to April 2015, to allow other changes to the pensions system time to bed in first.
Labour has indicated it supports a charge cap and would introduce one should they form the next government (at 0.75% initially before being lowered to 0.5%).
Labour attacked the Coalition Government for its failure to implement a charge cap during its time in office.
The National Association of Pensions Funds (NAPF) welcomed the delay to any cap on charges, having expressed concerns about both the level of detail and timescales involved.