Royal London has revealed adviser concerns about the potential impacts of lifetime provider proposals.
According to 63 per cent of the 94 advisers polled, the approach will make communication more difficult and reduce business interest in pensions, which will have a detrimental impact on employee outcomes.
Furthermore, 67 per cent of companies anticipate that maintaining workplace pension plans will be difficult because of the impact of making multiple payments to different providers.
Around 71 per cent of respondents don’t think there will be a rise in fraud in the pension sector.
Just 13 per cent of respondents think it’s a good idea for tiny pots to be automatically allocated to consolidator schemes; 24 per cent favour a “pot follows member” strategy; and 53 per cent are cautious, indicating that the effectiveness of the method relies on how it’s implemented in practice and which consolidators are engaged.
Royal London director of policy Jamie Jenkins says: “We have seen lots of debate about how the lifetime provider model might work, and our research provides a snapshot of what advisers think, considering both corporate and individual clients.
“Arguably, the most pressing issue is how we address the shortfall of pension provision for the younger generations starting out on their career, rather than rethinking the whole approach to retirement saving at this stage. We should build on the success of automatic enrolment rather than dismantle it.”
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