- The government believes that a charge cap of 0.75% is at the right level and does not intend to make changes at this time. Research by the Pension Charges Survey 2020 found that members in the schemes covered by the survey were subject to an average charge of 0.48%, well below the cap.
- The scope of the charge cap will not be extended to include transaction charges at this time.
- In response to concern at the erosion of small DC pots by flat fees, a de minimis pot size will be set before a flat fee element of a charging structure may be applied. The minimum level will initially be set at £100. The percentage part of a combination charge may still be applied to a pot below the de minimis level.
- Costs transparency initiative (CTI) templates were introduced in 2019. The government intends to monitor the adoption of the CTI templates and will look to legislate in future should levels of voluntary take up be unsatisfactory.
Consultation response issued on 13 January 2021.
Authored by the pension team