Press release

27 Oct 2021 London, GB

A charge cap for DC pensions will be welcomed by the industry and savers

Jason Whyte, Associate Partner in EY’s Life & Pensions practice, comments on the consultation of a charge cap for Defined Contribution (DC) pensions

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Jason Whyte, Associate Partner in EY’s Life & Pensions practice, comments on the consultation of a charge cap for Defined Contribution (DC) pensions:

“The Chancellor’s announcement of a consultation on the charge cap for Defined Contribution (DC) pensions will be welcomed by the industry and should be good news for savers. The charge cap has been effective in driving down costs for DC savers, but has made it hard for pension providers to offer their members illiquid or alternative investments that, while they cost more to acquire and hold, can deliver greater returns in the long run. A move to a more flexible cap that allows for these “patient capital” investments would support the Government’s desire to unlock institutional investment in innovative businesses, infrastructure and sustainability – something that is becoming more urgent as Defined Contribution overtakes Defined Benefit schemes as the largest pool of long term investment money. This is in line with the recommendations from the Bank of England’s Productive Finance Working Group.”

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