Savers ‘at risk of losing out’ if VfM framework not included in dashboards

Pension savers are at risk of losing out if the proposed value for money (VfM) framework is not included in pensions dashboards, B&CE, provider of The People’s Pension, has warned.

Research from the provider found that 43 per cent of pension holders were likely to move their pension savings from one provider to another if they could do so through a website that enabled them to see all their pensions in one place.

However, it also found that 45 per cent would not know what to look for when switching pension providers, which B&CE said would risk them making a decision that could lead to poorer outcomes in retirement.

If choosing to switch providers, 36 per cent said saving money on charges would be a factor in influencing their decision, 34 per cent would be influenced by the rate of return promoted by the pension scheme, and 12 per cent would consider moving to company with a better website or app.

Following the findings, B&CE has called for the VfM framework, which is currently in development by the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), to be included on pensions dashboards to enable savers to have “transparent and comparable” information before making a decision.

Commenting on the findings, B&CE director of policy, Phil Brown, said: “The government’s recent announcement detailing further regulations for pension dashboards will allow the industry to take the next big step towards making this hugely important innovation a reality.

“Our research shows that seeing all their pensions in one place may make it more likely for savers to transfer their savings to one provider, but they have little idea of what to look for to make the best decision for them.

“It’s vital for the FCA and TPR’s VfM framework to be clearly displayed on the platform, otherwise savers will not know for sure what’s the right move for them. Pension dashboards have the potential to revolutionise pension saving but this will only happen if consumers are provided with complete transparency.”

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