Labour promises pensions advice

Andover Advertiser: Rachel Reeves has unveiled measures to prevent pensioners losing out on retirement income Rachel Reeves has unveiled measures to prevent pensioners losing out on retirement income

Labour said it would ensure all savers get access to independent pensions advice to prevent the loss of up to £1 billion annually in retirement benefits.

The Opposition said the average person could gain £400 a year if they were helped to shop around for the best deal when converting their pension pot to a regular retirement income.

Shadow work and pensions secretary Rachel Reeves said the move would be part of a package of measures to prevent pensioners losing out, including action to expose fees and charges and impose a cap.

Pensions Minister Steve Webb has delayed the introduction of a proposed cap until at least 2015 to give firms more time to adjust, leading to Labour claims he had bowed to industry pressure.

Excessive charges are said to cost individuals as much as £230,000.

Labour said that if elected in 2015 it would also i mpose a legal obligation on pension providers to prioritise savers' interests over profits.

Ms Reeves said: "Millions of people who are working hard to save for their retirement face losing thousands of pounds because of David Cameron's failure to fix the broken pensions market.

"Rip-off pension fees and charges are costing savers thousands of pounds. An astonishing £1 billion a year is lost because people aren't offered the best deal when they approach retirement.

"A Labour government will ensure independent brokers help people turn their hard-earned private pension pots into a secure retirement income, saving thousands of pounds.

"We will also make sure that savers income is protected from excessive fees and charges.

"Millions of savers facing the cost-of-living crisis are paying the price for the Government's failure to step in and fix the broken pensions market. Labour will protect people's pension savings from rip-off fees and charges and reward people who save for their retirement."

Liberal Democrat Mr Webb said: "We have already banned consultancy charges in workplace pension schemes, and we will be taking further action to deliver value for money to pension savers.

"We have consulted widely and will publish comprehensive proposals in due course. It's incredible that the last government included no protection for scheme members in its plans for automatic enrolment, and we will put that right.

"With millions more people saving for retirement it is all the more vital that they also get value for money when they come to buy a retirement income.

"They must first ask whether an annuity is right for them, and then make sure they have shopped around for the best deal.

"We are determined to help consumers to make an informed choice and are already seeing changes in the market. Simply offering access to a broker won't answer the big question of whether an annuity is right for them."

A Conservative Party spokesman said: "Nothing's changed. Labour are once again proposing to tax hardworking people's private pensions, they are prepared to cut the basic state pension and they have no long-term economic plan to secure Britain's future.

"They would make people's retirement less secure all over again. It's the same old Labour."

Huw Evans, director of policy and deputy director general, ABI, said: " Workplace pension charges are already at their lowest ever level and have been falling for over a decade. A typical new scheme only costs 52% so a charge cap is not necessary to ensure workplace savers get good value for money.

"Insurers have led the way in recent years in helping annuity customers understand the importance of shopping around by publishing their rates and changing the way they communicate in the run-up to retirement. We look forward to discussing with Labour the details of its plans."

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