The director for pensions and investments consultancy Altus said, if competition is restricted, consumers will be prevented from benefiting from the entry of new providers to the market.
He said: “We are seeing more competition in the pension market. We have the new ‘super trusts’ competing with the National Employment Savings Trust for new auto-enrolment business and retail platforms are investing heavily in new pension propositions to compete with more traditional providers.
“But, for competition to work effectively, it must be possible for pension money to be transferred freely and consistently across all parts of the industry.”
His comments came as Altus published a 14-page industry white paper on pension transfers and the changing pension landscape. The white paper points out that a lack of “joined-up thinking” across the disparate parts of the pension industry is restricting competition and will prevent consumers benefiting from the entry of new providers to the pension market.
Key drivers for market change:
- 5m new pension policies created by auto-enrolment
- 1m new automatic ‘small pot’ transfers a year driven by the department for work and pensions
- 30% average annual growth in Sipps, of which 70% is transferred
- Increased demand for more sophisticated decumulation vehicles
Adviser view
Ashley France, paraplanner for Greater Manchester-based Ark Financial Planning, said: “We try to keep things clear for our clients, whether it is the fee structure or the investment products we recommend. We never got involved in the enhanced allocation rates for customers, we prefer clean-cut contracts so that people have the option to move to different advisers and providers if they want without penalties.”