Matthew Burrell, Senior Policy Adviser – Defined Contribution at the Pensions and Lifetime Savings Association said: “The figures reported by TPR in their DC Trust report make for encouraging reading. The 21% year on year increase in funds going into DC schemes shows that automatic enrolment is changing the way in which the nation saves. It is important to build on this success, and ensure that the upcoming increase in contribution rates is well communicated and does not lead to rising opt out rates.
“The report also demonstrated how integral Master Trusts have become to pension savings in the UK. The fact that the number of people saving into master trusts has reached 10 million is an indication of how fundamental they have been for the success of automatic enrolment. It also shows how important it is for industry and government to work together in order to ensure that these savers are properly protected by a robust and proportionate regulatory framework.”
Mark Baker, a pensions Legal Director at international law firm Pinsent Masons said: “The figures show why it’s vital to get the master trust authorisation regime right. The regime is all about giving confidence, showing 10m people with money in master trusts that their pensions are safe.
The big master trusts will be pre-submitting their authorisation forms in 3 months’ time. It’s essential that the Pensions Regulator gives a clear steer on the process. The pension providers need that clarity in order to give full confidence to their members.
The Regulator seems tuned into that. This is a big deal – more savers are now in master trusts than any other form of pension.”
Darren Philp, Director of Policy and Market Engagement, The People’s Pension, said: “The positive picture being painted by the Pensions Regulator demonstrates that we are moving in the right direction. The figures show that there are now 12.6 million who will benefit from a level of security in retirement that they might not otherwise have had and that auto-enrolment has got off to a good start. That said there are still fundamental issues to address and neither the Government, Regulator or industry can rest on their laurels.
“Consolidation is happening. The fall in the number of DC schemes being reported by The Pensions Regulator, suggesting a decline in riskier, sub-standard schemes, shows that the Regulator’s approach to raising standards is having an impact. But there is still much work to do in order to improve standards of governance and ensure value for money across all DC pensions.
“Pensions are a long term game. The true success will only be measured several decades from now and there is still much to be done to keep the auto-enrolment train on track. The focus in the short term has to be on the forthcoming contribution rate increases in April, which will tell us a lot about how people will respond in a system based fundamentally on inertia.”
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