The UK’s pension landscape is on the brink of significant change, with policymakers exploring the potential introduction of a lifetime provider model.

The model would see individuals potentially contributing into just one scheme.

This proposed model, alongside the introduction of multiple default consolidators, aims to address the challenges of small, deferred, and multiple defined contribution (DC) pension pots.

The model presents both challenges and potential benefits. Implementation would require a costly and time-consuming system overhaul, the cost of which may be passed onto members.

However, a larger, single lifetime pot may potentially lead to a greater sense of ownership amongst members, possibly increasing DC savings, as well as reducing the number of
expensive small, deferred pots.

Ongoing policy developments such as pensions dashboards, and the value for money framework, will further shape the pension landscape. Coordinated efforts among those designing these policies are necessary to allow for building on existing success and development, and to avoid duplication.

The model is more likely to be effective if introduced after current policies are rolled out, so remaining market gaps will be obvious, and policy infrastructure should have a more developed base.

Although the model has the potential to improve member outcomes, it does present challenges and a substantial amount of work will need to be undertaken to ensure it functions properly.

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