Government considering total ban on auto enrolment commission charges

The Department for Work and Pensions (DWP) has announced it is considering banning all commission charges in auto enrolment pension scheme in an effort to protect savers from increasing charges.

This announcement came as part of a consultation released by the DWP outlining proposals to cap charges for auto enrolment default funds.

In the proposal the DWP set out three different charge caps for auto enrolment funds – 1%, 0.75% or a two tier “comply or explain” cap.

Under the “comply or explain” cap, employers would have access to a 1% charge cap but would need to justify why the scheme charged over 0.75% to The Pensions Regulator.

The release went on to ask for views on whether commission should be banned in all auto enrolment qualifying pension schemes, stating: “We are interested in receiving views on whether commission should be banned and any evidence on the potential impacts of this measure.”

The full consultation can be found on the Department for Work and Pensions website.

Auto enrolment is highly complex, so one of the first steps you should be taking is educating yourself on the change, as well as what you need to do to prepare. If you are still confused about auto enrolment, why not download our free introductory guide?

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Stephanie Coward

Managing Director, HCM

Stephanie Coward is Managing Director for HCM at IRIS, where she leads the strategy, innovation and growth of the organisation’s HR and payroll portfolio. She is responsible for positioning IRIS as a trusted partner to HR professionals and ensuring its solutions support the evolving needs of modern workforces.

With more than 25 years’ experience in the technology sector, Stephanie brings deep commercial and operational expertise, with a passion for improving the employee experience through technology.

Stephanie is committed to advancing IRIS’ HCM offering and helping organisations build more resilient, empowered workforces.