The UK Department for Work & Pensions (DWP) is to consult on the introduction of a charge cap for default investment options in defined contribution (DC) funds.
The announcement came as pensions minister Steve Webb pledged to react "promptly and vigorously" to forthcoming findings from an Office of Fair Trading investigation into the level of competition on pension charges. The department also published the finalised draft of the Pensions Bill that will legislate for the single-tier state pension, the DWP's pot-follows-member proposals and a new statutory objective for the Pensions Regulator.
Webb has previously seemed opposed to a charge cap, voicing concerns it could result in consumers feeling a false sense of comfort over a product that falls just below a government threshold. The opposition Labour party, publishing a number of policy proposals last week, said they would legislate for a 1 per cent cap on charges.
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