The Society of Pension Professionals (SPP) has urged the government to “think again” on its proposed lifetime provider model, saying it is likely to prove both complex and costly.
In a research paper analysing these proposals the SPP acknowledges there may be some benefits from a lifetime provider model – also known as ‘pot for life’, where savers have a single pension scheme throughout their working lives. However it says this there are numerous drawbacks, including cost, and the government pension dashboards project could more effectively solve the small pension pots problem.
The paper – “Just one pension?” – examines the existing pensions landscape in the UK, employer governance, whether a lifetime provider model will improve member outcomes as well as the legislative and legal considerations of introducing this new system.
With contributions from various SPP members including pensions lawyers, administrators, consultants and advisers, the paper provides a broad insight as to pension professionals’ views on the government proposals.
SPP president Steve Hitchiner says: “The SPP’s latest discussion paper has clearly set out a number of sizeable challenges and downsides to a lifetime provider model. In our view, there are more effective alternatives, most notably a fully operational pensions dashboard system, that would be a far better use of resources.
“As well as making any requirement for a LPM largely redundant, concentrating on other pensions policies that are already in motion increases the chances of those policies succeeding; a genuine win-win solution.”
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