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

Misuse of scam warning flags unnecessarily delays transfers
Thousands of pension transfers are being held up unnecessarily by providers who are raising flags for transfers that have no real scam risks, accordin
Gen X signals a shift in work life priorities
Twice as many UK workers want a sabbatical than have taken one – with Gen X (44-59) showing the biggest gap between desire and reality. Health and we
Trustees play key role in pension scams crackdown
Trustees play key role in pension scams crackdown as £48,000 lost every day to fraud and lump sum withdrawals rise 60%

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.