New pension savers are in danger of sinking their cash into poor-value schemes as the Government’s landmark retirement reforms roll out, the trading watchdog has found.
Up to eight million workers will be automatically placed into a defined contribution (DC) workplace pension by their employer over the next five years as part of efforts to get people saving more for their later years.
The Office of Fair Trading (OfT) is carrying out a probe into DC schemes and will publish its full findings next month.
Fears have been raised that many people will have little previous experience of pensions and there is a danger smaller employers in particular could bring investors into schemes which do not represent a good deal.
The watchdog is looking at aspects of the market including the size of the pension pot people are likely to end up with on retirement, whether or not there is enough pressure on providers to keep their costs down and how clear charges are.
