The People’s Pension has overtaken Nest as the biggest auto-enrolment master trust pension scheme in the market by fund size.
As of March, The People’s Pension reported assets under management of £949m; almost £70m more than Nest’s £880m.
But at least £110m of The People’s Pension’s assets came from transfers out of other pension schemes.
Nest is unable to accept transfers until 2017.
Nest remained the biggest master trust by headcount, with a total of 3.1 million members, though it acknowledged that figure included inactive accounts.
At the end of April, The People’s Pension counted just over two million members, including 1.2 million that were active (i.e. making ongoing contributions).
The People’s Pension also had far fewer employers signed up; 21,000 to Nest’s 100,000.
Both providers dwarfed their nearest competitor, Now: Pensions, which had assets under management of just under £250m, 900,000 members and 19,000 employers.
Darren Philp, head of policy and market engagement at The People’s Pension, said simplicity was at the core of the scheme’s success.
He said: “We think pensions don’t need to be complicated and we focus on creating simplicity for employers and scheme members.
“That, coupled with the fact we are not for profit, means employers trust us to do the best for people saving in the scheme,” he said.
The scheme targets new employers through intermediaries, rather than going directly to employers, a strategy Mr Philp said it would stick with as micro-businesses reach their staging dates this year.
“We know that even the smallest employers have trusted business advisers and our focus is on supporting them to help their clients,” he said.
Gavin Perera-Betts, director of product and marketing at Nest, said it was “great to see the auto-enrolment market working effectively to help millions of workers save for their retirement”.
But he pointed to restrictions unique to Nest as a contributing factor to The People’s Pension’s superior AUM growth.
“Nest currently has restrictions in place which limit the amount members can contribute in a financial year and also prevent members from transferring pots into Nest. These restrictions are being lifted in 2017,” he said.
B&CE puts its total AUM - including The People’s Pension and the EasyBuild construction workers’ pension - at £2.6bn. It confirmed that the £949m figure referred solely to funds in The People’s Pension.
Tom Binstead, an adviser with Kellands, said he used to recommend The People’s Pension to his corporate clients, but stopped when the scheme introduced a charge on businesses.
Now he gives his clients two recommendations: Nest, because it doesn’t charge businesses, and Aviva.
He said he favoured Aviva over The People’s Pension because it has a more recognisable brand.
“As a business, your staff are likely to ask questions about your chosen scheme. So would you rather tell them the name of a well-known brand, or one they’ve never heard of?” he said, adding that returns tend not to figure, because “they’re all much the same”.
james.fernyhough@ft.com
