Pensions - Articles - Pot for life seems to be a lose lose lose policy


Following the rumours that Jeremy Hunt will offer UK workers a ‘pot for life’ in tomorrow’s Autumn Statement, Mark Futcher at Barnett Waddingham shares his views on the risks of the plan.

 Mark Futcher, Partner and Head of DC at independent consultancy Barnett Waddingham, comments: “Looking at the successes of the Australian pension scheme, it’s easy to see why Mr Hunt might be tempted to let employees choose their own pension fund. But the context in the UK is wildly different; we already have a mature employer-based pension system, in which the employer is partly responsible for ensuring members get good value. A sudden shift to a ‘pot for life’ risks people choosing a suboptimal pension plan, being swayed by marketing over value, and ultimately exacerbating the UK’s retirement crisis. What’s more, the rumoured shift to a nominated scheme wouldn’t necessarily solve the problem of savers having multiple pots, or solve the Government’s desire for big schemes investing in high-growth UK assets – this seems to be a lose, lose, lose policy.
 
 “Pension saving is, by its nature, a long-term problem. The Government must not be allowed to play fast and loose with the rules simply because it has an eye to an election in a year. There is plenty of room for change in the UK’s pension system, but it will only succeed if adequate time, resource, and effort is put into building it. For a ‘pot for life’ to work, there must be a robust central clearing house, a working pension dashboard, and a faultless administration system which directs contributions and amplifies the employers’ critical role in ensuring value and good governance. Twenty-four hours’ notice to a system overhaul can only result in one thing; chaos.”
  

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.