Plans to enrol nine million more workers in company pension schemes are set to be investigated by regulators, it emerged today.
The Office of Fair Trading said it would look at whether defined contribution pension schemes — a cheaper alternative to final salary ones — deliver “the best value for money for savers”.
About four million people in the UK currently save in defined contribution schemes, a figure that is expected to more than double by 2018 due to automatic enrolment legislation.
This forces employers to pay into a workplace pension scheme for their staff unless the worker opts out.
Since October, the new rules have being phased across businesses of different sizes. Mary Starks, senior director at the OFT, said: “It is important that these savers get a good deal.
“We want to take a look at the market now to ensure that providers are competing to offer the best possible deals, and that the choices made by employers mean that employees are saving into good pension schemes for their retirement.”
Annual contributions into the UK pensions market are expected to grow to around £11 billion by 2018.
The OFT said that it plans to complete its investigation by August.
Mark Wood, head of JLT Benefits Solutions, said: “Review of the charges made by pension firms is important to make sure competition has worked in favour of the millions of workers who will auto enrol.”
