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Groups criticise pension reform plans

Groups criticise pension reform plans

Changing jobs in the future could cost workers up to a quarter of their pension, according to critics of proposed Government reforms.

The Department for Work and Pensions (DWP) conceived the ‘pot-follows-member’ plan for people to take their pension scheme with them when they swap employers, with an emphasis on preventing millions of schemes lying dormant after an employee switches jobs.

But leading charities and consumer groups have urged the DWP to have a rethink over the scheme, which they have labelled as “impractical”, “unacceptably risky” and potentially “highly expensive”.

The comments were made in an open letter to The Daily Telegraph, which was signed by host of consumer chiefs including Joanne Segars, the chief executive of the National Association of Pensions Funds (NAPF); Peter Vicary-Smith, chief executive of Which?; Michelle Mitchell, director general of Age UK; and the TUC general secretary, Brendan Barber.

They said the ‘pot-follows-member’ proposal could see consumers moving their pension policy from a good scheme with low fees to a poor scheme with high fees when they change employers, potentially reducing the value of the pension by up to a quarter over the course of a workers life.

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