Government, regulators and major pension providers have launched the ‘Pound for Pound’ initiative, a pilot designed to test value-based metrics ahead of the forthcoming Value for Money framework.
The initiative was unveiled at a roundtable yesterday (22 July), hosted by pensions minister Torsten Bell MP. It brings together major providers including Aviva, L&G, Smart Pension, TPT Retirement Solutions, NatWest Cushon, and People’s Pension, working in partnership with benchmarking firm SuperRatings.
The event marked the first public discussion of the pilot, which aims to move beyond cost-based comparisons by using anonymised benchmarking and drawing on lessons from Australia’s superannuation system, including the use of both qualitative and quantitative data to assess value.
The roundtable was chaired by People’s Pension CEO Patrick Heath-Lay and Aviva wealth policy director Emma Douglas, and included representatives from the FCA, DWP, Pensions UK, several Mansion House Accord signatories, and Kirby Rappell, CEO of SuperRatings.
Findings from the pilot will inform the Government’s upcoming VFM consultation and support the development of the Pension Schemes Bill 2025, with broad consensus on the need for clearer definitions and a stronger regulatory framework for value.
People’s Partnership CEO Patrick Heath-Lay says: “The Government’s drive to evolve the pensions market and centre it on value is a significant step change. As a pension provider, shining a light on how we ‘measure up’ on value in a transparent and consistent way is a major shift but one that we must all rightly embrace. This needs to be introduced in a well-planned and effective manner that aligns to Government reforms, enables effective regulatory oversight and most importantly instils greater confidence in the pension system for savers. We set up the £4£ initiative to help inform this shift in focus from cost to value, and we are really encouraged by the shared appetite to collaborate and support this fundamental market change.”
Aviva wealth policy director Emma Douglas says: “Getting the value for money framework right is an essential part of shifting the focus in workplace pensions from cost to value. The Pound for Pound initiative gives us the opportunity to test the key metrics in advance and to learn from this, as well as from the Australian experience.”
Pensions UK director of policy and advocacy Zoe Alexander says: “Getting value for money for UK savers is a key driver for the UK pensions industry. The Pensions Schemes Bill will introduce new requirements across much of the sector. We know measuring it is complex. We need clarity and evidence to establish the most effective data points for this new framework to ensure savers get the biggest bang for their buck, and to avoid excessive red-tape reporting. Though no system is perfect, there’s a lot to learn from our colleagues in Australia about their value for money outcomes regime and we look forward to testing this in the UK context.”
