UK - The Association of British Insurers (ABI) has urged the Personal Accounts Delivery Authority (PADA) to favour a charging structure for Personal Accounts which combines an annual management charge (AMC) with a contribution charge.
She said: "Fairness and sustainability must be the basis for setting the charging structure for personal accounts.
"Combined charges are widely used in mortgages, mobile phone contracts and bank accounts. They will allow for the effective management of the significant set up costs of personal accounts."
Yesterday, PADA said today it had over 40 responses to its consultation from industry bodies, pension scheme providers, consumer groups, employer groups and interested employers.
While there was no clear consensus view on the most appropriate charging structure for personal accounts, the majority of respondents were in favour of either AMC charge-only structure; or a contribution charge with an AMC.
Rachel Vahey, AEGON's head of pensions development, said it also favoured combined charges.
She said: "It's good to see that PADA recognises the advantages of a combination of an annual charge and contribution charge which we believe is a more sustainable option.
"The alternative of a flat annual charge would mean higher up-front costs to taxpayers, more chance that personal accounts customers will face higher charges in future, and more chance that the scheme might have to go cap-in-hand to the Treasury at some point in the future."
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