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<p>By 2018, around 10 million people will be saving or saving more into pensions as
a result of automatic enrolment. The Government wants to ensure that people who are
automatically enrolled are protected from high and unfair charges. This is why in
April 2015 we introduced a cap of 0.75% on administration charges for people who are
invested in the default fund of schemes used for automatic enrolment. We have also
taken steps to cap or ban early exit charges in occupational pension schemes, as these
can act as a barrier to individuals wishing to access the pension freedoms. We have
also banned member-borne commission charges in workplace pension schemes used for
automatic enrolment.</p><p> </p><p>We are currently examining the level of the charge
cap to see whether it should change and whether some or all the costs associated with
investment transactions should also be covered. The Government expects to conclude
its examination by the end of this year.</p><p> </p><p>In 2016, the Department for
Work and Pensions and the Financial Conduct Authority (FCA) undertook a joint review
on industry progress in reducing charge levels in older, so-called legacy pension
schemes. The report published in December 2016 found that over 1 million customers
have benefitted, or will soon benefit, from a reduction in costs and charges to 1%
or lower. The Government and FCA wrote to these pension providers earlier this year
challenging them to make further improvements. The Government is pleased with the
progress so far and we and the FCA will continue to work with providers to ensure,
wherever possible, that all members of these legacy schemes benefit from reduced charges.</p>
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