Auto-enrolment is constantly changing and evolving says national IFA, pensions and employee benefits consultancy LEBC Group.
This is due, says the firm, to some key providers having already dropped out and many others considering their positions.
Divisional Director at LEBC Glynn Jones said: “More and more providers are introducing either set up fees or ongoing employer charges in an attempt to ensure that this area of their business does not become a loss leader. As we progress from 2016 into 2017 there will be hundreds of thousands of employers who will have to set up AE solutions and as such it would appear the market will continue to rationalise over this time with the number of advisers and providers in this space likely to reduce.
“It is likely that only those with well-established support processes will be able to survive in a low cost environment but those that can could have an increasingly larger sector of the market to deal with.”
On whether more employers will end up with NEST as the default provider, Jones added: “Currently NEST doesn’t charge a set-up fee although it does apply a cost to each new contribution which is levied on the member so may cause The Pension Regulator some concern going forward. Also NEST do not have the option to transfer funds in or out of their contract so members may incur fees in the future if they are looking to bring their pension arrangements together.”
