Nearly half of savers in the dark when switching providers

Nearly half of savers in the dark when switching providers

More than four in 10 pension savers said they would not know what to look for when switching providers.

More than two in five of the 2,104 savers surveyed by B&CE, the provider of The People’s Pension, would be likely to transfer their savings between providers if they could use a website that allowed them to see their pensions in one place.

The findings are the latest in a flurry of research conducted into consumer behaviour surrounding the pensions dashboards, which are due to be launched in 2023.

Last month, Ipsos Mori said that the dashboards initiative will struggle to get off the ground if it offered a limited ‘find only’ service, which listed pension entitlements but not their values. 

The government subsequently confirmed that the dashboards will include a ‘find and view’ offering, allowing members not only to see their pension entitlements, but also the value of those entitlements.

Meanwhile, the Financial Conduct Authority and the Pensions Regulator are developing a value-for-money framework for defined contribution schemes. 

In a bid to increase competition between “good value schemes”, the watchdogs want the framework to disclose information that they believe encapsulates good value for money. 

This would include investment performance, data quality and communications, and costs and charges.

B&CE called for the inclusion of this framework in pensions dashboards. Philip Brown, B&CE’s director of policy, warned that savers would otherwise “not know for sure what’s the right move for them”.

“Pensions dashboards have the potential to revolutionise pension saving, but this will only happen if consumers are provided with complete transparency,” he said.

B&CE also called for new value-for-money regulations to be implemented in the retail market, as well as workplace pensions. Research from the Pensions Policy Institute uncovered a wide charging gap between members of uncapped retail schemes and capped master trusts.

B&CE’s research found that saving money on charges would be a factor in switching their pensions provider for more than a third of pension savers, while 34 per cent would be encouraged to switch provider by a pension fund’s advertised rate returns. 

In addition, 12 per cent of those surveyed would weigh up changing to a company with a superior website or app.

Fatima Benkhaled is a reporter at FTAdviser's sister publication Pension Expert