Where is compare the pension? One of the UK’s most vociferous pensions commentators, Henry Tapper, gives his views on why he believes there’s enough information that can be compiled to create a ‘MoneySupermarket’ for pensions. We look at his key reasons why this could be a reality.
As a well-seasoned and engaging commentator, the views of Henry Tapper in relation to a price comparison site for the pensions market are well worth mulling over. On his Pensions PlayPen blog, Tapper noted that MoneySupermarket.com has a vast amount of detail about a great proportion of the UK public.
While outlining the full detail of every pensions option might be difficult, he says that “disclosure should be about helping people to make complex decisions easily.”
He believes there is “no reason” why generally available data could not be compiled and compared to help people make pension decisions.
The example he cites is for fund management. As he states, the cost and ‘slippage’ on each fund is known; we know the performance of each fund and the risk taken by the fund manager (risk-adjusted performance can be measured); and the cost to be in the fund.
In other words, collating the cost of being in the fund, adjusted by risk creates a value-for-money score.
For Tapper, the complexity of pensions and different options open mean many people don’t bother trying to manage their financial situation.
“Because pensions are so complex, so diverse, so scattered and (by at large) abandoned by the people who set them up, the general public have no information with which to take decisions,” says Tapper.
“Consequently, people do nothing – they do not even try to manage their own money.”
While not doubting the difficulties involved, he says that various regulatory and market-defining changes have occurred which could give a marketplace momentum. Namely the Retail Distribution Review; auto-enrolment; the FCA’s review of financial advice; and pensions freedom.
“Perhaps I’m a dreamer,” states Tapper.
“But I dream of those 25 million people signing up to a pension comparison service that delivers them without cost and obligation – with a series of value for money scores on their various pension pots that enables them to take decisions.”
Kevin Reed is one of the UK’s most senior accounting and finance journalists. He is a former editor of Accountancy Age and Financial Director, and writes regularly on corporate and professional services governance.
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