Despite auto-enrolment being brought in a year ago, the government is still tinkering with the rules. Its latest move is to propose a cap on auto-enrolment pension charges.
But advisers have highlighted several concerns around what could happen if the government goes ahead with its plans.
1. Limited investment choice
Too low a cap will limit the fund choice available and therefore investment outcome, according to Ruth Whitehead of Ruth Whitehead Associates.
“The government talks about pension ‘savers’, but your pension contributions aren’t savings, they’re invested,” she says. “It stands to reason that you should have your pension invested in the best and finest funds available. In order to do that, you should have as wide as possible range of fund options from externally-managed investment houses such as Invesco Perpetual or M&G.”