These days, it feels like just about everyone is interested in taking from your pension in the form of fees. Thankfully, Government is finally saying that enough is enough. New rules are in place now that ban companies from forcing consultant’s charges on their employees who join automatic-enrollment pension plans.
External companies can indeed still give advice to firms about pensions, but the trouble comes in that employers can pass this cost to the staff. Advocates of financial responsibility in the marketplace have indicated that this can definitely eat into first year savings. Consumers are definitely fighting back in a big way.
One of the new changes is that there is a cap being placed on default funds — the funds where your money is invested unless you choose to put it somewhere else. This is can be quite the rip off, considering that you’re already taking a lot of risk on the marketplace. You get to make sure that you finally get to let your pension account grow. Some people feel that their pension would grow better if they had less fees, and they’re absolutely right.
If you’re going to take advantage of pension plans in the workplace, you really need to watch the market. Don’t just let them dump your money into a default account. Steven Webb, the pensions minister, is rolling out new proposals to try to protect consumers. The truth is that it really needs to be a hybrid approach. You need to watch out for your own interests, and then you also need to have protection in the marketplace from the obvious rip offs. It’s really a give and take type of thing, when you really think about it.
The pension age is increasing to 67 in a few years, which means that savers really need to be aware of all for the fast-paced changes in the marketplace. Now is definitely the time to get things moving forward, so don’t get behind in the news. Good times are ahead for consumers, slowly but surely.