Personal Pension  

Ernst & Young in talks on pension ‘bank account’

Jason Whyte, director at consultancy EY, has revealed to FTAdviser the firm is working with a “technology partner” to explore models for a “retirement bank account”, arguing solutions could be in the market in time for the April implementation.

In a video interview with Financial Adviser’s Simoney Kyriakou, Mr Whyte said “it is certainly possible to deliver something for April”, but that it would depend on whether providers were willing to invest before seeing where the market is going.

However, he added that “once somebody does go ahead, it is likely to become a hygiene factor and a must have” because “the UK population loves cash”.

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Mr Whyte’s comments come after the Your Money section of the Daily Telegraph revealed challenger firm Wisepensions had become the first to confirm it will be launching what it has branded a pension fund “credit card” next year.

The card would be used to buy goods in the same way as you might use a debit or credit card, with balances reconciled and tax paid from the pension fund at the end of the month.

Mr Whyte said: “I don’t know whether anyone is going to bite the bullet and go ahead because the investment is something that people are holding back from until they have a clearer view of where things are going.

“The UK population loves cash. There was a Defaqto survey recently that said 36 per cent of retirees are planning to take the money out and just put it in a bank account, which isn’t necessarily the best plan but it gives you an idea of how strong an affinity the UK feels for cash.

“There is a real consumer benefit in giving them easier access to that money, not just in that having access to money is a right that people increasingly demand, but also in that if they can keep it in a pension and only access it when they need it and be confident that they can get that money quickly, they are more likely to keep it within the pension.

“It gives them better options for managing their tax, better options for investment and tapping into market growth rather than relying on bank rates but they will need help and guidance to make those decisions effectively.”