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November 8, 2023
New rules will eliminate charges on small workplace pension pots from next year, the Government has announced.
The Department for Work and Pensions (DWP) said the move will benefit hundreds of thousands of savers.
According to the report, new regulations will introduce a threshold – known as de minimis – at which automatic enrolment pension scheme providers will no longer be allowed to charge a flat fee to savers.
The threshold will be set at £100, meaning pension savings invested in the default funds of schemes with a value of less than that amount will be exempt from paying flat fees.
It comes after research revealed that workers who take on short-term work and change employers frequently are at risk of having their pension pots wiped out by scheme fees.
The new rules are set to come into force from April 2022 alongside the new pensions dashboard – a new online hub that will enable savers to keep track of their pension pots more easily.
Commenting on the move, Minister for Pensions, Guy Opperman said: “Removing flat fees on pension savings worth less than £100 will provide a boost to hundreds of thousands of people and help them enjoy the retirement they deserve.”
According to the latest statistics, more than 10 million employees have paid into a workplace pension scheme since the introduction of automatic enrolment in 2012.
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