NOW: Pensions comments on the annuity reforms announced in today’s budget

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For immediate release: Wednesday 19 March 2014

Morten Nilsson, CEO of NOW: Pensions said: “There’s no doubt that the annuity market in its current form is outdated and ineffective.

 Giving savers greater flexibility over how they access their pension pot is good news. But by handing them a completely free rein it feels like the Chancellor is throwing the baby out with the bathwater.

 By introducing auto enrolment, the government acknowledges that there is an inherent lack of interest in pension saving. To expect savers to have sufficient knowledge to make good choices at retirement, feels somewhat counter-intuitive.

 If this policy is to work, advice is imperative otherwise there is a real risk that savers will end up making ill informed decisions.

 The pensions industry needs to move quickly to adapt to this new environment developing more innovative, flexible and competitive at-retirement products.

 One of the unintended consequences of this radical change is that some of the larger players who make a large proportion of their profits from annuity sales might choose to exit the market.”

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For further information:

Amy Mankelow
NOW: Pensions
Tel: 07941 105879
amy@nowpensions.com

Victoria Leyton
Lansons Communications
Tel: +44 207 294 3620
nowpensions@lansons.com

NOW: Pensions www.nowpensions.com

@nowpensions

NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.

A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Christopher Daykin, former Government Actuary
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors
  • Imelda Walsh, former Group HR Director of Sainsbury’s
  • Nigel Waterson, former Shadow Pensions Minister

Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

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I've known ATP for many years and have enormous respect for the effectiveness of their investment strategy. I'm convinced that NOW: Pensions can become a major player in the UK and look forward to being a part of that success. — Chris Daykin, the former Government Actuary
...its simple design means the pressure is taken off us as the employer and avoids costly administration charges, whilst removing the burden of choice and ensuring the best possible retirement outcome for our employees. — Matthew Johnson, Head of Compensation and Benefits at Adecco Group UK & Ireland
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary
Why do we insist on having a choice of fund manager when the evidence shows there is usually no benefit to be gained…and there is always a negative impact in terms of cost? — Anthony Hilton financial editor of the Evening Standard writing in Pensions World, June 2013
There is a need for a member-centric solution designed for ease of use with low costs and cutting edge investment strategy, which delivers long term stable returns. ATP's in-house investment capabilities, combined with our novel and innovative… — Lars Rohde, Governor of the National Bank of Denmark and Former CEO of ATP Group