Five entirely depressing findings from the DC charges audit

If the workplace pensions industry should be judged by how it treats existing customers then today's revelations on defined contribution scheme charges find it at best unfair and at worst extortionate.

The Independent Project Board, set up to dig deeper into an area analysed last year by the Office of Fair Trading, looked at workplace pensions sold pre-2001 – or those sold since that have charges of more than 1 per cent, or more than one type of charge.

This amounts to £56.9bn in contract-based schemes and £10.6bn in bundled trust-based schemes, which is almost two-thirds of the UK defined contribution market. Using a reduction in yield measure – which contains all costs paid except transaction costs – the board found a depressing picture.

The nation has £26bn of savings in poor-value schemes

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