An Office of Fair Trading (OFT) investigation into workplace pensions has found widespread evidence of schemes offering poor value for money to millions of savers, leading the regulator to call for a crackdown on the industry.
The results of the review come as thousands of firms across the country prepare to auto-enrol their employees into a workplace pension scheme over the coming months.
Auto-enrolment forms part of the Government's drive to address the pensions crisis by encouraging more people to invest in their retirement. Since its launch in October last year, one million workers have been auto-enrolled.
According to the OFT, however, five million people who are already saving into a defined contribution (DC) pension scheme are in some cases not getting best value for money.
The OFT is calling for reforms that will make the industry more transparent, helping employers and employees to compare pension scheme costs and provider charges.
It is also recommending that the Department for Work and Pensions (DWP) take immediate action on schemes that penalise members when they stop contributing.
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