A recent survey found that 70% of employers argued that the British Pension Schemes lack innovation in the pensions market.
It needs new ideas and innovative solutions, 65% of employers suggested that British Pensions were far too complicated and that providers were failing to innovate enough to offer new solutions and progressive ideas in their schemes.
Moreover, around 45% of employers believed that ensuring all employees have decent funds when they retire was a huge challenge, with auto-enrolment not ensuring people will have a appropriate income when they retire.
Since the shift to defined contribution (DC) pension plans, there has been hardly any changes to core pensions products.
The government’s intercessions in the market in recent years such as introducing auto-enrolment, reducing annual allowances and loosening the rules on accessing funds at retirement has done very little to change the fundamental defined contribution scheme offerings and possibly, it has made the current pensions system even more complex.
Over 35% of employers had commented that a lack of employee engagement as an issue, some 36% of employers stating that one of the most important elements when selecting a pension provider is good communications that will engage members.
This supplements analysis by the Financial Conduct Authority, which revealed that pension freedoms had partly driven a significant risk of harm to pension investors.
While employers are now legally obligated to enrol their employees into a pension scheme, providers are also under little pressure to innovate or disturb the market as they have a ensnared market for their products.
The pensions market in the UK is desperate for new ideas and innovations.
In the last 20 years there has been a sizeable movement in the way pensions are managed, there has been hardly any change to the core products and this is desperately needed to bring new ideas and innovations that the British pensions market needs and to really get people committed with saving for their retirement