Savers are at risk of losing out if the proposed Value For Money (VFM) framework is not included on pension dashboards, according to B&CE, provider of The People’s Pension
According to new research from the leading pension provider, more than two out of every five pension holders, or 43 per cent, are likely to transfer their savings from one pension provider to another if they could do so through a website that allowed them to see all of their pensions in one place. However, more than four in ten, or 45 per cent, would be unsure what to look for when switching pension providers, putting them at risk of making a decision that would result in a poorer retirement outcome.
When asked what factors would influence their decision if they chose to switch providers, 36 per cent said saving money on charges would be a factor, 34 per cent would be swayed by the rate of return promoted by the pension fund, and 12 per cent said they would consider switching to a company with a better website or app.
B&CE believes that the Value For Money Framework, which is currently being developed by the FCA and TPR, should be included on pension dashboards to ensure savers have transparent and comparable information before making a decision. It also wants the new VFM regulations to apply to the retail market as well as workplace pensions, citing research from The Pensions Policy Institute (PPI) that found a significant charging gap between members of uncapped retail schemes and members of capped master trusts.
B&CE, provider of The People’s Pension director of policy Phil Brown says: “The Government’s recent announcement detailing further regulations for pension dashboards will allow the industry to take the next big step towards making this hugely important innovation a reality. Our research shows that seeing all their pensions in one place may make it more likely for savers to transfer their savings to one provider, but they have little idea of what to look for to make the best decision for them.
“It’s vital for the FCA and TPR’s Value For Money framework to be clearly displayed on the platform, otherwise savers will not know for sure what’s the right move for them. Pension dashboards have the potential to revolutionise pension saving but this will only happen if consumers are provided with complete transparency.”
