People’s Partnership outlines its plan for a fairer deal for pension savers

People’s Partnership, one of the UK’s leading providers of workplace pensions has today outlined what it thinks the nation’s future political leaders can do to make retirement saving fairer for savers.

The provider of The People’s Pension to 6.7 million people, has issued a four-point plan which it believes will help improve the retirement prospects of Defined Contribution savers, including the 11 million who have started saving through automatic enrolment since its launch in 2012. It believes that whoever wins the General Election on July 4 should consider its proposals, which it believes would put savers at the heart of pensions policy.

The not-for-profit provider is calling for political leaders to commit to:

• A target retirement income. Too many people are not on track for an adequate pension in retirement. Government should set out target pension incomes, to be achieved through a combination of the state pension and workplace pensions saving. Without clarity over what the combination of state pension and workplace pension saving should achieve, it’s impossible to say what the level of either should be. Clarity is critical to helping UK savers plan for their future.

• Competition should work in the interests of the saver. People’s Partnership supports measures to help judge whether or not pensions offer value for money. Regulatory policy should encourage healthy competition on the things that drive good outcomes for consumers. Too often competition is opaque and unhealthy, focused on brand and marketing. There should be transparent and standardised value for money metrics that enable anyone to make objective judgements about pensions and these should cover the whole market. These should focus on the outcomes that savers are likely to receive from pension saving. They should be front and centre on pensions dashboards.

• Pension market reform. Building scale pension schemes should be a priority. Large, well governed schemes will offer economies of scale. They should offer better value to savers and be able to invest in a wider range of asset classes, helping deliver politicians’ ambition for pension schemes to invest more in UK illiquid assets. Larger schemes, held to a new quality standard should be enabled to sweep up the small pots that have proliferated as a result of automatic enrolment. These schemes should be the core of a more consumer-oriented market.

• Economic role of pension funds. Politicians of all parties are right to focus on the role of pension funds as investors in the UK economy. This focus should not come at the expense of savers, who need the best possible return from their invested pension savings. Any policy to increase UK pension funds’ domestic investment should place the interests of savers at its heart. 

Patrick Heath-Lay, Chief Executive Officer, of People’s Partnership, said: “As a profit for people provider that looks after retirement savings of a fifth of the UK workforce, as well as being an organisation that was set up for social good, we are committed to standing up for savers. Although workplace pension saving has come a long way in the past 12 years, the system still doesn’t work in the very best interest of savers.

“We believe that, if implemented by decision makers, our four-point plan would go a long way to improving workplace pension saving for millions of people.”

ENDS