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Small Pension Pots - Is the Lifetime Provider Model A Solution?

Journalist: Riz Malik

ended 22. November 2023

In the Autumn Statement, the government has said that it will tackle the problem of “small pot” pensions by launching a call for evidence of a lifetime provider model. This will allow individuals to have contributions paid into their existing pension scheme when they change employers. The aim is to provide greater agency and control over pensions.

Is this a positive step to simply pensions? Are there any disadvantages? How would such a policy be administered?

We welcome your thoughts on this breaking story.

2 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This is an incoherent solution by a frankly incompetent Department for Work and Pensions. The administrative burden on business from paying individual pension contributions to different schemes each payroll will increase costs to a level that companies will stop employing people. Unworkable.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
I like the idea in principle although it sounds like it would be an absolute nightmare to establish. For example, an employer of a big firm might have 1,000 employees across 30 different pension schemes. Would they have to make payments to each provider? Perhaps there would be a centralised system that receives contributions and then allocates them out to each pension company on every employee/employer's behalf. On the positive side, if you only ever have one pension pot, it is much easier to manage both from an individual's point of view and from an adviser's point of view.