Nikhil Rathi is chief executive of the FCA. Credit: FCA
The Financial Conduct Authority has confirmed it will consult on the pension charge cap to make sure consumers are not disincentivised from investments with higher performance fees.
In a letter to Prime Minister Keir Starmer earlier this week, FCA chief executive Nikhil Rathi updated the government on its approach to growth.
It noted that, in January this year, it had set out almost 50 pro-growth measures – adding it had now delivered "the vast majority of these and more".
It said it aimed to go further next year and set out its aims for 2026 – including plans to further unlock capital investment and liquidity, accelerate digital innovation, reduce regulatory burden and make it easier for firms to start up and grow.
Among the measures it plans for 2026, the FCA said it would reform rules for venture capital and alternative investment fund managers and consult on the pension charge cap so consumers are not disincentivised from investments due to higher performance fees.
The charge cap is the annual amount that can be charged to savers in default arrangements within defined contribution (DC) pension schemes used for auto-enrolment.
The cap has applied since April 2015 and is currently set at 0.75% of funds under management within the default arrangement, or an equivalent combination charge. It applies to all scheme administration and investment charges, excluding transaction costs.
