- “We believe the lifetime provider – or ‘pot for life’ – model would radically change the UK pensions market, and we have significant concerns on the proposals being put forward” – Fidelity International
- Fidelity International’s own research of employees revealed that while 65% agree with the idea of giving savers the opportunity to choose their workplace pension provider, they would most likely remain with the pension provided by their employer
James Carter, Head of Platform Product Policy, Fidelity International, comments on research from the Association of British Insurers (ABI) revealing the potential impact of Government proposals to introduce lifetime provider models on both employers and different groups of savers.
“These latest findings from the ABI’s research highlight the potential risks posed by the introduction of lifetime provider models. Since its introduction automatic enrolment has revolutionised workplace saving and ensured that millions of people who were not saving for later life previously are now in a pension. We believe that the lifetime provider – or ‘pot for life’ – model would radically change the UK pensions market and unwind much of this progress.
“While we welcome the government actively engaging on the topic of pensions and its efforts to create more secure financial futures for the population, we echo the ABI’s concerns about the proposals being put forward. We question whether the reforms would enable better outcomes for typical members or deliver the policy ambitions put forward in the call for evidence.
“As highlighted by the ABI’s research, the proposals have the potential to undermine the role of the employer in supporting engagement in pensions and the achievements of automatic enrolment. ‘Pot for life’ proposals could be harmful to those whom automatic enrolment was designed to benefit. We need to stay focused on the successful delivery of other initiatives, such as the development of pensions dashboards, already in flight, and turn soonest attention to increasing the levels of pension contributions being made.”
Research findings from Fidelity International’s research of employees
Fidelity recently polled employees on their attitudes towards workplace pensions. In principle, savers/employees are attracted to the concept of freedom and flexibility that a ‘pot for life’ provides. Four-fifths (80%) of respondents said they should have the opportunity to choose which pension scheme their workplace pension contributions are paid into.
In reality, however, the picture is very different with a majority of employees taking comfort in the safety net their existing employer model provides. Key findings from Fidelity’s research includes:
• 65% agree that they like the idea of giving savers the opportunity to choose, but would most likely remain with the pension provided by their employer
• 50% agree that they would feel concerned about knowing the responsibility for choosing their workplace pension rests with them
• 75% agree that they like the idea of being able to choose their workplace pension provider, but would want access to advice/guidance of some kind to help inform their decision
• 51% agree that they worry it could widen the pension gap between those who are financially confident and those who aren’t
Source: Research conducted among a nationally representative sample of 2,000 adults conducted through Opinium Research, 9th to 13th February 2024.
