Member Article

Auto-enrolment market evolving

National IFA, pensions and employee benefits consultancy, LEBC Group believes the pensions auto-enrolment (AE) marketplace is constantly changing as some key providers have already dropped out and a good proportion of the others are considering their positions.

LEBC’s Divisional Director Glynn Jones said, “More and more providers are introducing either set up fees or ongoing employer charges in an attempt to ensure that this area of their business does not become a loss leader. As we progress from 2016 into 2017 there will be hundreds of thousands of employers who will have to set up AE solutions and as such it would appear the market will continue to rationalise over this time with the number of advisers and providers in this space likely to reduce.

“It is likely that only those with well established support processes will be able to survive in a low cost environment but those that can could have an increasingly larger sector of the market to deal with.”

LEBC expects that more employers will “end up with NEST”, as the default provider and many business advisers (Accountants, for example) seem content to use NEST for their clients.

Jones added, “Currently NEST doesn’t charge a set up fee although it does apply a cost to each new contribution which is levied on the member so may cause The Pension Regulator some concern going forward. Also NEST do not have the option to transfer funds in or out of their contract so members may incur fees in the future if they are looking to bring their pension arrangements together.”

This was posted in Bdaily's Members' News section by LEBC Group Ltd .