Inquiry into costs and transparency of pension products launched by MPs

MPs are looking into how people could be encouraged to pay more attention to their pension pots and whether they are getting value for money.

A Work and Pensions Committee inquiry will consider whether the pensions industry provides sufficient transparency around charges, investment strategy and performance.

The inquiry will look at whether enough is being done to ensure people understand what they are being charged and why and that they can see how their money is being invested and how their investments are performing.

It will also look at whether people are engaged enough to use information about costs and investments to make informed choices about their pension savings.

Significant changes to the pensions landscape in recent years include millions of people being brought into workplace saving through automatic enrolment and the launch of the retirement freedoms giving people a wider range of options.

But the committee said there have also been broader concerns about low levels of customer engagement and understanding.

Key questions it will consider include whether the  Government is doing enough to ensure that workplace pension savers get value for money and how people can be encouraged to engage more with their pension pots.

It also wants to hear evidence on the subject of whether pension customers get value for money from financial advisers.

The deadline for submissions is September 3.

Tom Selby, senior analyst at AJ Bell, said: "MPs are set to make providers sweat as part of a broader drive to ensure savers are able to squeeze every last drop of value from their pension pot."

He continued: "We also welcome the committee's focus on engagement."

Mr Selby continued: "We believe in the wake of the pension freedoms there is significant room for simplification of the information providers are required to send to savers.

"These documents often run to 30 pages or more of complicated and confusing information which very few people pay any attention to."

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