The Office of Fair Trading (OFT) has launched an investigation into the value for money of workplace defined contribution (DC) pensions schemes.
It said the review was prompted by automatic enrolment legislation, which will see millions of workers start contributing into DC schemes for the first time. It said annual contributions were expected to rise to about £11bn by 2018.
At present about four million people are DC scheme members. Auto-enrolment means another six to nine millions workers will be enrolled in the next five years.
The OFT said it decided to "take a forward look now to see whether competition will work in the best interests of these savers to deliver low cost, high quality pension schemes".
The study will focus on value for money and the size of pension pot savers end up with at retirement.
It will look at:
. How pension providers compete with one another and how the market may develop over time
· Whether there is sufficient pressure on pension providers to keep charges low, and the extent to which information about charges is made available to savers
· Whether smaller firms face difficulties in making pension decisions in the interests of their employees
· Whether smaller firms receive appropriate help and advice in setting up and maintaining workplace pension schemes
· Barriers to switching between schemes and a potential lack of ongoing employer engagement in setting up and managing pensions.
Mary Starks, senior director in the OFT's services, infrastructure and public markets group, said: "'The UK workplace pensions market is set for rapid growth and change over the next six years, in particular with the introduction of automatic enrolment.
"It is important that these savers get a good deal. We want to take a look at the market now to ensure that providers are competing to offer the best possible deals, and that the choices made by employers mean that employees are saving into good pension schemes for their retirement."
The OFT said it would work closely with the Department of Work and Pensions, The Pensions Regulator, the Financial Services Authority and others during the course of its study.
The study should be completed by August.
Steven Cameron, head of regulatory strategy at Aegon said: "This investigation is an opportunity to look at various supply and demand aspects of DC pensions in the round. Like the OFT, we also wants to deliver high quality pensions to members of DC pensions. There is already intense competition to keep charges as low as possible.
"Various industry initiatives are further enhancing the provision of information, including helping employers make important decisions. We're pleased to see OFT will also examine if smaller firms receive help and advice.
"Advisers play a key role and we have concerns regulation is making it harder for them to help such employers. Advisers also encourage greater employer engagement which is particularly key as we progress with auto-enrolment."
National Association of Pension Funds chief executive Joanne Segars said: "The OFT study is a useful initiative and part of a growing focus questioning whether pensions can offer more value to savers. Charges and annuities are a particular concern, and we hope the OFT sheds some light on these issues, which can make a huge difference to a pensioner's income.
"The market is changing and charges have fallen over the years, but there is still further to go to ensure people get the best possible value from a pension."
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First mentioned in Cridland Report