SPP publishes analysis of proposals for the lifetime provider model

The Society of Pension Professionals has published an analysis of proposals for a lifetime pension savings pot that would operate throughout an individual’s working life irrespective of job changes.

In the report, the SPP warns that introducing an effective lifetime provider model is “unlikely to be up and running [within] the next decade” so “will probably not provide any benefit for those who are less than ten years away from retirement”.

Concern is also expressed that the lifetime provider may create a high risk that savers become stuck in poorly performing schemes and that the vehicle will probably encourage consolidation leading to only a limited number of very large providers.

The report’s conclusion states that the main problem the new model would seek to address is that of multiple small pots but sizeable challenges and disadvantages remain. However, pursuing more effective remedies, such as a fully operational pensions dashboard system would be a far better use of resources. As well as making any requirement for a lifetime provider model largely redundant, concentrating on pensions policies that have already been set in motion also increases the chances of those policies succeeding.