Investigation: Future of DC  

How pot for life might work for UK pension scheme members

  • Describe some of the changes being discussed by the DWP
  • Explain some of the objections
  • Identify the reasons in favour
CPD
Approx.40min

“That is why the chancellor announced at the Budget that we will continue to explore if this model could improve outcomes for savers.”

Ultimately, the problem is that it would not be building a new DC system from the ground up, which is what happened in Australia.

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There are currently 26,390 trusts-based schemes, including 36 master regulated by TPR, and 1,830 contract-based schemes regulated by the FCA.  

And, as Rob Yuille, head of long-term savings policy at the Association of British Insurers, says: "It would be a perfectly valid system to introduce if you're starting from scratch. It's the change and implementing it that's more problematic than the concept itself.

"It's changing the incentives for consumers and employers."

Melanie Tringham is features editor at FT Adviser

CPD
Approx.40min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. The pot for life/lifetime provider concept imagines the employee moving the same pot around with them from every provider, true or false?

  2. Pensions dashboards are considered to have no role in the future of the pot for life structure, as envisaged by the DWP?

  3. Which of the following is NOT a concern about the consequences of the pot for life concept?

  4. Why, according to Peter Glancy, is the pension industry not interested in the pot for life concept?

  5. Why is Standard Life keen for it to go ahead?

  6. Many in the pensions sector believe that it would be better to leave things alone, and allow the other plans to take effect before further radical change, true or false?

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  • Describe some of the changes being discussed by the DWP
  • Explain some of the objections
  • Identify the reasons in favour

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