B&CE, provider of The People’s Pension1, has today backed plans for new value for money regulations to be applied to the retail market as well as workplace pensions, following new research from The Pensions Policy Institute (PPI)2.
The PPI’s latest report, What is the impact on member outcomes of different non-capped charging structures?3, looks at the effect that different charging structures could have on pension savers. The research concludes that while average pension savers are neither engaged or motivated by what they are charged, there is a charging gap between members of schemes that are subject to the charge cap and those who are customers of uncapped schemes.
B&CE believes that the intention from The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), for a new framework to assess value in both workplace and retail pensions, is the right way forward. The leading workplace pension provider believes savers should have a clear idea about how different pension schemes and products compare and, while charges are very important, this should be broader than charges.
Phil Brown, director of policy and external affairs at B&CE, provider of The People’s Pension, said:
“This research shows how significantly charges can impact retirement incomes. With charges generally lower in workplace pensions than in retail, for many people thinking about transferring out of lower cost workplace pensions, it would be better to stay put.
“But value for money is about more than just charges. The FCA and TPR are right to propose a value for money framework that covers all of DC pensions, as savers should be able to examine the value for money offered by both workplace and retail pensions. It will be tough to fine tune, but it will provide real transparency to both professionals and savers.”
Note to editors
- The People’s Pension is a leading workplace pension scheme from B&CE, serving more than five million pension savers across the UK, with over £16 billion assets under management. With no shareholders, it uses its profits to help people build financial foundations for life.
- The Pensions Policy Institute (PPI) is an independent educational research charity: It does not lobby for any particular solution and is not a think-tank taking politically influenced views. The PPI is an educational research charity, which provides non-political, independent comment and analysis on policy on pensions and retirement income provision in the UK. Its aim is to improve the information and understanding about pensions policy and retirement income provision through research and analysis, discussion and publication.
- To request an embargoed copy of the report please email Danielle Baker, Head of PPI Membership & External Engagement, at Danielle@pensionspolicyinstitute.org.uk
- In September 2021 the FCA and TPR outlined its framework for value for money in DC schemes. The consultation will close on December 10.