Rishi Sunak wants to lift cap on pension fees

331
2
Rishi Sunak wants to lift cap on pension fees

Rishi Sunak is interested in lifting the cap on pension fund charges.

We use your sign-up to provide content in ways that you've consented to and improve our understanding of you. This may include adverts from us and third parties based on our understanding. The Chancellor is confronted with how to find more funds for government projects amid record levels of debt in the UK.

As the Treasury looked to help keep the economy afloat during the Coronavirus crisis, borrowing soared.

According to the ONS, at the end of the last financial year the total debt stood at 2.131 trillion.

With Mr Sunak looking at lowering the debt level while also crafting policy plans to help spread opportunities across the country, he is now thought to be looking at pension funds.

Policy advisers are working on a proposal to dilute the annual cap of 0.75 percent in management fees.

Introduced two years ago, the cap protects workers auto-enrolled in workplace pensions.

But policy advisers are looking at whether to change the rules to encourage defined contribution DC pension funds to invest more heavily in British assets, according to the Financial Times.

The higher fees would help to fund long term projects such as better infrastructure, renewable energy projects and innovative tech.

Any announcement on a final policy is expected to be announced at the Budget.

On 27 October, the Chancellor will outline his spending plans in the House of Commons.

Although the plans would lead to higher fees, government insiders hope that investing in longer-term assets will lead to better returns for Britons.

The policy recommendation comes after a Working Group of the Treasury, Bank of England and Financial Conduct Authority recommended a review into the charge cap.

They suggested a loosening of the rules could help stimulate more UK investment.

It comes after Britons have already faced considerable extra costs due to the recent pandemic in recent months.