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13 July 2012
Responding to Ed Miliband's comments on pensions today, Otto Thoresen, Director General, Association of British Insurers said:
“It is absolutely wrong for Ed Miliband to imply that a 4% or 5% pension charge is normal. Pension charges have been falling steadily for the last decade and are continuing to fall. In newly set up automatic enrolment schemes the average annual management charge of our members is 0.52%. The average annual management charge for existing schemes is 0.77%. For many other existing schemes, both large and small, charges can be lower than 0.3%. Nobody in the pension industry would defend a charge of 5% for a standard new pension and we would ask Ed Miliband to write to us with details of the schemes that he is referring to.
“The pensions industry is absolutely committed to ensuring that charges are as low as possible and that customers understand what they are paying. We will continue to deliver further change but this type of misinformed attack does not reflect the considerable progress the industry has already made.
“This is a critical time for pension saving in this country as we face the challenge to make the automatic enrolment reform, introduced by the last Labour government, a success. Scaremongering about charges runs the risk of putting off many people from saving into a pension, which is critical for their financial future.”