New research from leading online pension provider, PensionBee, reveals a notable enthusiasm among c.1,000 UK pension holders for the recently announced ‘pot for life’ pension model.
Over three-quarters (76%) of pension savers expressed that they would consider opting for the new model, while only 5% of savers stated that they would not be interested in having their own pension into which employers can pay contributions.
Of the respondents who were considering the new proposal, the most popular reasons for support included ‘it seems more convenient’ (55%) and ‘it’s an easier concept to understand than the current system’ (48%). Other positive responses included ‘I like that I would be able to choose my provider from a fee perspective’ (30%), ‘a long-term relationship with one provider might make me feel more engaged with my pension’ (30%) and ‘I like that I would be able to choose my provider from an investment choice perspective’ (24%).
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “The Chancellor’s announcement of a consultation on allowing savers to choose their own pension into which employers can pay is a welcome step.
Our research suggests this could be met with strong support from workers. Careers are becoming more complicated. People can have several jobs throughout their lifetime, or go self-employed for a time and then go back to employment. They might consolidate old pensions, then continue to build new ones through subsequent work and want to have these contributions paid into their personal pension, but may find their employer might not yet allow it.
This simple change could give those who want to build their own pension and have the convenience of having an employer pay straight into it the opportunity to do so.”
Appendix
Table 1: Would you consider a ‘Pot for Life’ pension?
| Response | Percentage (%) |
|---|---|
| Yes, I would definitely consider a ‘pot for life’ pension | 39% |
| Yes, I would probably consider a ‘pot for life’ pension | 37% |
| I’m not sure | 19% |
| No, I probably wouldn’t consider a ‘pot for life’ pension | 4% |
| Yes, I definitely wouldn’t consider a ‘pot for life’ pension | 1% |
Source: PensionBee, November 2023. 982 UK pension savers. Numbers have been rounded.
Table 2: What do you like about a ‘Pot for Life’ pension?
| Response | Percentage (%) |
|---|---|
| It seems more convenient | 55% |
| It’s an easier concept to understand than the current system | 48% |
| I like that I would be able to choose my provider from a fee perspective | 30% |
| A long-term relationship with one provider might make me feel more engaged with my pension | 30% |
| I like that I would be able to choose my provider from an investment choice perspective | 24% |
| It might incentivise pension providers to offer a better, more personalised service | 20% |
| A long-term relationship with one provider might make my pension feel more secure | 20% |
Source: PensionBee, November 2023. 982 UK pension savers. Participants were able to select multiple options. Numbers have been rounded.
