Savers will benefit from new rules outlined by the Department for Work and Pensions, which will introduce a threshold at which pension providers won’t be able to charge a flat fee.
The rules mean pension savings invested in the default funds of auto-enrolment schemes with a value of £100 or less will be exempt from flat fees from April 2022.
The change is primarily designed to help individuals who regularly take on short-term work and change jobs frequently, as there is a greater chance they will be automatically enrolled into new workplace pensions a number of times, building up a collection of small deferred pots.
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.”
The introduction of the threshold will complement plans to introduce pensions dashboards, which will allow savers to track their small pension pots more easily, helping them better plan for retirement.
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