PensionsMay 22 2013

Pot-follows-member cost is ‘unachievable’: B&CE

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ByFiona Nicolson

The director of customer solutions for B&CE, provider of The People’s Pension, said that what pensions minister Steve Webb is proposing with the plans for ‘pot-follows-member’ was not going to be achievable without a high cost.

He said although Mr Webb had promised to bring in rules for cheap annual small pot pension transfers, the costs of individual transfers would need to get down to “at least £1 for each transfer for it not to have a significant effect on provider costs and hence member charges”.

Mr Fiveash said: “Having modelled what is involved with pot-follows-member extensively with other providers, we can’t see how this level of cost is achievable.

“We urge the Department for Work and Pensions to analyse the full impact before setting out the details of its policy.”

He added that, where decisions are made without appreciating the knock-on effect – the implementation of the poll tax in the 80s being a good example – those decisions will have far-reaching consequences.

James Norton, director at Evolve Financial Planning in London, commented: “There is a cost in transferring pensions and the industry does seem to be inefficient at this across the board, but it is ridiculous to compare this to the implementation of the poll tax.”


- Pensions minister Steve Webb’s promise was made earlier this month at a seminar run by The Pensions Network, hosted by Legal & General.

- Last month, the government published plans to force automatic transfers by providers of pots worth less than £10,000.