Pensions firms hit back after Labour says charges are rip off

Julian Harris
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THE PENSIONS industry was put on the defensive last night after a stinging attack from Labour leader Ed Miliband in which he claimed that it could be the focus of the “next big scandal” to knock the financial sector.

Miliband claimed that he is aware that some people are facing four or five per cent administrational charges on their pensions, costing them tens of thousands of pounds over time.

But the Association of British Insurers lashed out at the Labour leader’s “scaremongering”, adding that it could deter people from saving for their retirements.

“Pension charges have been falling steadily for the last decade and are continuing to fall,” it said, citing an average rate of just 0.52 per cent for new schemes.

Meanwhile, the government has delayed the publication of its plans to raise the state pension age and replace the current system with a single tier pension.

Instead of releasing the details yesterday as planned, a white paper will be published in the Autumn with the aim of bringing the changes into force in the next parliament.