In the fourth episode of EY’s Re-imagining Pensions, Paul Kitson, head of UK pensions consulting at EY and Charlotte Moore, co-founder of Moore Squared Communications, are joined by Patrick Heath-Lay, CEO of the People’s Partnership.
Much of the pensions bill currently making its way through parliament is focused on improving auto-enrolled workplace pensions, says Patrick.
We discussed how we are likely to see a decade of consolidation as pension providers position grow their assets under management. Once the dust has settled, Patrick said he expected there would be 10 to 15 pension providers.
Patrick unpacked whether consolidation and a value-for-money framework would contradict one another and whether it could kill innovation by making pension schemes match investment strategy. He argued that a VFM framework was vital as a tool for comparison and innovation would be needed to stay competitive.
We also addressed the issue of small pots and how a million small pots are created every year. While the current proposed legislation and the introduction of the dashboard will give people greater awareness, Patrick said this was a problem which would need to be fixed in the next round of legislation.
When it comes to retirement income, we talked about it was important to put member need front and centre. With pot sizes currently small, most was likely to be withdrawn but the industry needed to do what it could to encourage members to do something better with their pots than simply leave in their bank accounts.
Finally, we offered Patrick a magic wand to change anything he wanted in the pensions industry – he said we needed to refocus on the member and remember that they do not care about the same things as the industry, they just want a good retirement.
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