NOW: Pensions responds to HMT consultation freedom and choice in pensions

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For immediate release: Wednesday 11 June 2014

In its response to the HM Treasury consultation Freedom and Choice in Pensions, NOW: Pensions made the following observations:

  • All providers and schemes should outsource the provision of the guidance guarantee to ensure consistency and complete independence.
  • The cost of the guidance guarantee should be met by an industry levy. The levy should be paid by those who are most likely to benefit from the asset pool which will be available for ongoing investment.
  • For a guidance service to be effective, the person providing the guidance should have information on all the member’s pension arrangements, current and old. For this to work in practice, a central register of all entitlements maintained by a central agency would be essential so that individuals can get up to date information on all their different pension entitlements.
  • While providers and schemes should strongly encourage members to obtain guidance, a separate independently produced generic fact sheet with appropriate signposts should be available to members should they not wish to access the guidance on offer. This should be produced by the same body that is responsible for the guidance guarantee.
  • In the automatic enrolment environment, face-to-face, regulated advice will be too expensive to provide and unnecessary for the vast majority of members. For those that require this level of service, it would be better for the cost to be borne by the member, subsidised by the government.
  • The availability of guidance at a single point in time does not appear to be in the best interest of the member whose circumstances will certainly change in the ten years prior to retirement and indeed after they have retired. We therefore believe that to make the service effective, ongoing access must be offered including online access to information and guidance.
  • There are currently few, if any, products which can enable members with small retirement funds to access an income drawdown type of product. We do not envisage that there will be a wide choice of products by April 2015, and therefore retiring members in the early days after April may look forward to greater flexibility in retirement, but discover that there are no products to provide the flexibility they seek.

Morten Nilsson, CEO of NOW: Pensions said: “Getting the guidance guarantee right is imperative otherwise there is a real risk that savers will end up making ill-informed decisions, the consequences of which will affect the rest of their lives.

“But, guidance is just one part of the picture. The other critical consideration is product range and availability. At the moment, the market is playing catch up and there are few, if any, products which will allow savers to make full use of their new freedoms.”

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For further information:

Amy Mankelow
NOW: Pensions
Tel: 0203 640 9075 / 07941 105879

Victoria Leyton / Valentina Kristensen
Tel: +44 207 294 3620 / +44 207 5669720

NOW: Pensions


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:

  • Jocelyn Blackwell, founding partner Dunnett Shaw
  • 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
  • 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
I am backing NOW: Pensions, the ATP project, because I believe it will encourage transparency, low costs and decent returns for millions of British employees. — Nigel Waterson, former Shadow Pensions Minister
NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions. — Martin Woods,
Our broker recommended NOW: Pensions, as they believed it would be our best option. We have not been disappointed, the NOW: Pensions customer support teams are great and always available. — Bromborough Paint & Building Supplies Ltd
NOW: Pensions was attractive to us because the staff were very helpful and they sent over all the information required. This made the decision easy. — Metro Surveillance Group Ltd