Update from the Department for Work and Pensions (DWP) ahead of a major pension restructure – Are you a victim of this?
Hundreds of thousands of people might be affected if the Department of Work and Pensions (DWP) implements a “shake-up” in the way pensions work.
The Department for Work and Pensions (DWP) is outlining its proposals to adjust its attitude to smaller pension pots in order to preserve Britons’ finances. It has opened a consultation on the subject, which might result in a change in how providers manage pensions. Many people will have a modest pension pool, either as a result of working for a short time or for other reasons.
Because some people do not have a consistent or continuous income from one job, their pension account may be significantly smaller than that of others.
However, fees for management and other related expenditures are frequently associated with pension arrangements, which can eat into a person’s savings.
These types of levies would be limited under the Government’s consultation in order to protect smaller pension accounts.
The introduction of a £100 threshold below which a person cannot be charged a flat cost by their pension provider has been proposed.
The government claims that this will assist to safeguard smaller pension accounts and the people who own them.
It’s likely to be good news for those who have a lot of contracts or employment, or who don’t have a lot of consistent income.
The consultation is also expected to assist consumers in better understanding their pension arrangements.
It’s a step toward the long-awaited pensions dashboard, which will allow consumers to track their retirement assets in one convenient location.
“We all know what a success automatic enrolment has been in getting more people investing into private pensions – with over 10 million employees contributing into a workplace pension since 2012,” said Guy Opperman, Minister for Pensions.
“However, some people, particularly those who take on short-term jobs and change occupations frequently, are more likely to be automatically enrolled in new workplace pensions many times, accumulating a collection of modest pots.
“It is this group that we wish to assist by modifying the way fees are calculated.”
As people get closer to retirement, they’re encouraged to track down all of their pension funds, including smaller former arrangements.
They may be able to combine these pots in the future to make them easier to manage.
However, if they do, Britons will have to respond quickly. “Brinkwire News in Condensed Form.”