Too many pension providers in UK, Now: Pensions says
Provider new to UK market argues there are too many pension funds and expects to see consolidation in industry
Britain’s pensions market has become crowded and has more schemes than needed, despite the impending auto-enrolment legislation, one provider has claimed.
Morten Nilsson, chief executive of Now: Pensions, told Money Management in a video interview the market is too spread out.
“I think in general there are too many providers in the UK,” he said. “There are definitely too many pension schemes in the UK.”
Now: Pensions launched in the UK in October 2011 backed by large Danish pension scheme ATP. Rather than offering a range of pension funds, it offers one default option into which all contributions are invested.
Nilsson said there are 50,000 different pension schemes in the UK, which in his mind is “way too many”.
He said, “The market is expanding with auto-enrolment so you have more low earners coming in and the market is increasing significantly and therefore there is space for good providers, but we expect to see consolidation over the next few years.”
Nilsson added that many companies will need advice as they deal with pension requirements for the first time. “There is a big advice need for companies,” he said.
Employees will also need guidance, he added, since so many will not have saved before. “We aim to work with advisers and see how we can give people the information they need,” he said.
To watch the full interview, click here.