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Now:Pensions News

24th Sep 2015
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http://www.linkedin.com/redir/redirect?url=http%3A%2F%2Fwww%2Emoneymarke...

Hardly a shock I think? 
Come 2016 there will be few pension providers who will offer a service that does not carry a charge for administration....in my opinion. 
NEST already charge the employee 1.8% up front. TPP have discussed it in the past but have not yet introduced a charge (will this be the catalyst??) ...and most of the high st insurance companies charge fees higher than this already. 
The key for me is value for money...is £40 or whatever charge is agreed good value for whatever NOW will offer? 
I would also like to know how this will affect those accountants who have done "deals" based on a one size fits all offering with NOW? Clients pre Oct no fee ...clients post Oct a fee?? 

Interested in your thoughts..........

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By Henry Tapper
27th Sep 2015 17:50

Deals

If an accountant is doing deals then let's hope there's some due diligence beyond "NEST and Peoples are better than NOW and Standard Life because they are free".

Choosing a pension is an important decision for the people who's money is being invested. It is staggering that the standard of debate on this subject is so low.

As you say Steve, important decisions need a proper analysis of "value for money". I worry that if this work isn't done , we will see members in class actions against employers and employers in class actions against multi-employer providers and those who reccomend them.

Anyone who has recent experience of 401k class actions in the states and/or PPI and pension mis-selling should remind themselves of the perils of poor due diligence and weak buying.

 

 

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By [email protected]
28th Sep 2015 09:20

Very quiet....

Henry,

Absolutely....but I would really like to hear from the accountants out there as well.

Would love to know what stops you reviewing client options or what makes you need to review client options in your opinion??

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Locutus of Borg
By Locutus
30th Sep 2015 10:37

Most accountants find it difficult to be engaged by AE
I know little about the pension industry and pros and cons of various schemes, so when clients stage, in the future they will have to tell me which scheme they intend to use. I have no intention of recommending any and I think most accountants share that view.

If a client chooses to use an IFA or a software product such as yours to make the decision then all well and good. If not then the risk is theirs.

Personally, I think most employers just want a scheme that is of low cost to them which is simple to administer. Other factors, such as how appropriate the scheme is for the workforce are highly subjective with no right or wrong answer and indeed which would change as the workforce changes.

I feel the risk of class action against anyone is unlikely. Firstly, if any employer uses an AE compliant scheme, then it must have gone through some sort of regulator approval, so the employer would hardly be making a reckless decision by selecting it. Secondly, if an employee doesn't like the employer's scheme then they can simply opt out of contributing to AE. Thirdly, the vast majority of employers have less than 10 employees, so there is not much of a "class" to spread the legal fees across.

In my opinion, the real problem from the employees perspective is that they will be left with a myriad of piddling small pension pots that have built up across their working lives, which regardless of the investment performance will each only give them pocket money in retirement.

Looking forward to the bugs getting fixed in AE 2.0, whenever that is released.

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By [email protected]
30th Sep 2015 13:03

@Locutus

https://www.accountingweb.co.uk/article/now-pensions-unveils-ae-charge/5...

I don't disagree with some of the points you make but please click on the link above and read the comments. A number of accountants (small I hope) are ushering all of their clients down one road without rhyme or reason outside of "it suits me!".

Also the suggestion that all should now move away from a scheme set up by said accountants within two years because it again suits them is scary! 

They are out there and this is not an isolated incident unfortunately.

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