“We welcome the government’s efforts to review the pensions landscape, but it’s crucial that members best interests remains the priority. While scale can provide access to new investment opportunities and lower costs, it’s important not to lose sight of the diverse needs of pension savers across the UK. A one-size-fits-all approach directed by government could end up harming the very people it’s meant to help. Consolidation for its own sake, without considering the broader impacts, could reduce competition, limit choice, and stifle innovation.
“In the future pensions landscape, there is definitely a role for both Master Trusts, Single Employer Trusts and Group Personal Pensions (GPPs). Removing Master Trusts or constraining fiduciary duty, which requires trustees to act in members best interests, would be a significant loss to the market and savers – the fiduciary duty concept is so very well aligned to working in the interests of savers and securing long-term financial outcomes for members.
“On the topic of investment, we don't believe the government needs to directly intervene by mandating specific asset allocations. Instead, the government can encourage change through clear guidance and transparency, ensuring that trustees retain the ability to act in the best interests of their members, without the risk of unintended consequences from heavy-handed intervention.
AE Road Map crucial component of Phase 2
“Looking ahead, we’re also urging the Government to focus on Automatic Enrolment (AE) in the next phase of the review and most importantly, a collaborative approach to developing an AE Roadmap. This would include reviewing the adequacy of contribution levels, the wider scope of AE, as well as delivering on the recommendations from the 2017 Automatic Enrolment Review.
“This review should take into account the cost-of-living crisis, impact on members and employers, and promote greater inclusion, especially for the under-pensioned such as women, where our research in our gender pensions gap report found that women would need to work 19 more years than men in order to save the same amount.
“The UK pensions system is facing both immediate and long-term challenges. We believe it’s time for a more strategic, consensus-driven approach to reform, with clear safeguards in place to ensure that pension savers remain at the heart of all decisions."
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