Pension Charges Cap Disclosure Rules

Published / Last Updated on 01/04/2022

Defined contribution (i.e.  investment funds linked) company pension funds worth £100m or more are required to comply with a maximum charges cap of 0.75%pa to protect consumer/pension savers from higher charges.  The issue is that fund managers and pension scheme providers do not have to include performance fees within the cap.

There have been calls from consumer lobby groups to include performance fees.  It is thought that with the government legislating that performance fees do not have to be included in the charges cap will encourage funds to invest in illiquid assets as these tend to be performance related as you do not earn by buying and selling stocks as illiquid assets cannot be sold daily.

The government wants to stabilise pension fund investment and support illiquid asset such as commercial and green infrastructure projects which may take many years to generate profits.


We believe that all elements of charges incurred by a fund and therefore pension savers pots should be included including performance fees.  It should not and never be ‘smoke and mirrors’ on charges just to support government investment aims.

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