Consumer Panel calls for new standard for cost reporting on pension funds

The Financial Services Consumer Panel has today set out a new standard of cost reporting that would make pension funds costs and charges more transparent.

Costs deducted from the fund have a significant impact on the amount an individual can build up, and consequently on the retirement income they can draw. However, as research the Panel commissioned in 2014 showed, the full extent of these costs is simply not known.

The proposed standard would improve the transparency of pension funds, by surfacing the readily available underlying asset management and other provider costs. The standard would provide trustees and independent governance committees – responsible for assessing value for money for scheme members - with clearer sight of the charges the schemes are paying.

The standard is based on research by Dr Christopher Sier.  In his paper he explains how the standard could work in practice and provides examples of various pension schemes’ experiences with collecting costs and charges.  For example:

  • One of the 89 Local Government Pension Scheme (LGPS) funds after chasing all outstanding invoices found that reported costs rose from 10 basis points to 92 basis points. Actual costs to the LGPS fund did not rise, merely the way they were reported.  However, surfacing the costs in this way enabled the scheme governors to negotiate with suppliers and achieve a reduction in costs of approximately 10 basis points for 2014-15.

The Panel believes it is now imperative that those governing pension schemes have clearer sight of the charges they are paying to give them a basis for negotiating savings for their members. The Panel therefore proposes that the FCA, DWP and TPR, along with the relevant professional and trade bodies, define and implement a new standard for data collection of costs and charges on UK pension funds.

Sue Lewis, Financial Services Consumer Panel Chair said:

“The problems of cost opacity and conflicts of interest in asset management are well known and long-standing. We are always being told there is a solution just round the corner, whether it is European legislation or the work DWP and the FCA have done on transaction charges. While the direction of travel is welcome, millions of pension savers are still losing out year after year by paying too much in unseen costs and charges. We are recommending a small step that could be implemented quickly and make a big difference to tomorrow's pensioners, without prejudicing more far reaching change to come."







Consumer Panel:                                       020 7066 9346




  1. The Markets in Financial Instruments Directive (MiFID) is a European Directive covering the regulation of investment services in the European Economic Area. MiFID II will require the full disclosure of costs and charges. It will not initially apply to pension funds and implementation may now be delayed to January 2018.
  2. Another piece of European legislation, the Regulation on packaged retail and insurance-based investment products (PRIIPs), introduces a key information document (KID) that will provide key facts to investors in a clear and understandable manner. All costs and charges must be included in the KID, in a standardised format.
  3. Dr Christopher Sier is currently a Managing Director at Stonefish Consulting and a co-lead on FiNexus, a programme to build a series of research and innovation centres in the UK for financial services. He is an authority on pension fund costs and complexity.
  4. The Consumer Panel is a statutory body under the Financial Services Act 2012.  It was initially established by the Financial Services Authority in December 1998. The Panel advises the FCA on the interests and concerns of consumers. 
  5. The Panel’s membership is drawn from a broad range of backgrounds with expertise including market research, law, financial services industry, financial inclusion, European Regulation, financial regulation, consumer advice, campaigning, communications, compliance and later-life issues. 
  6. The emphasis of the Panel's work is on activities that are regulated by the FCA, although it may also look at the impact on consumers of activities outside but related to the FCA's remit. More information about the Panel's work is available on its website: or via its LinkedIn and Twitter accounts.
  7. Panel members are:


Sue Lewis (Chair)

Jennifer Genevieve

Mark Chidley

Dominic Lindley

Jonathan May

Pamela Meadows

Liz Barclay

Faith Reynolds

Caroline Barr

Jeff Salway

Teresa Fritz

Kitty Ussher

Doug Taylor

Sharon Collard