Standard Life comments on Small Pot consultation outcome

  • Consolidation option chosen over pot follows member
  • Small Pots remain a difficult issue

Gail Izat, Managing Director for Workplace at Standard Life, part of Phoenix Group said:

"We welcome the government's renewed commitment to make progress on the issue of small pots. With the average person working more than 10 jobs in their lifetime, a side-effect of auto-enrolment has been the exponential growth of deferred small pots which is not in line with our ambition to engage people in better financial futures.

"The government has chosen to proceed with the consolidation option, in which any small deferred pots will be transferred to a pre-determined consolidation destination. We have some reservations with this approach as it currently stands, as it could run the risk of distorting competition. However, we're looking forward to analysing the proposal in detail and working with the government and industry peers to make it a success for members.

"Our first preference would have been for a 'pot follows member', whereby pensions under a certain size automatically transfer when people change jobs. It's an easy concept for consumers to understand and, in a charge cap environment, concerns about the value for money offered by receiving schemes are lessened."

Standard Life welcomes the update on the Value for Money framework

Gail Izat, Workplace Managing Director at Standard Life, part of Phoenix Group said:

"The Value for Money framework represents a huge opportunity to empower both pension professionals and savers. By introducing consistent measures across a complex market, there's scope to create greater comparability and transparency of outcomes.

"We welcome the fact that government and regulators have taken on industry feedback and have decided to place more of an emphasis on investment performance and quality of service. The expectation levels of members on customer service keeps rising and it is only right that pensions keep up with expectations.

"Ensuring comparability of investment performance is one of the most complex areas and care will need to be given to ensuring appropriate benchmarks are selected and in comparing performance at different stages of the saver's journey."

Claire Altman, Managing Director for Individual Retirement at Standard Life, part of Phoenix Group, comments on the consultation on policy proposals for DC decumulation and on proposals to encourage greater use of CDC

Commenting on the consultation on policy proposals for DC decumulation and the income solutions provided at retirement:

Claire Altman, Managing Director for Individual Retirement at Standard Life, part of Phoenix Group, commented: “The DWP’s Consultation on DC decumulation shines a much-needed spotlight on what happens ‘at retirement’, a sector which is ripe for innovation. The gradual decline of defined benefit to defined contribution has shifted responsibility (and the financial decision-making that comes with it) to individuals to manage their money. More must therefore be done to not only make sure people are saving enough, but to help people with the decisions that they need to make on how to manage their savings when they reach retirement, particularly with people living longer, and the cost of living crisis.

“We welcome the intention of placing duty on trustees to provide a range of decumulation options for each pot or member – we think this can only be a good thing. We need to move away from the notion that people approach retirement and put all their eggs in one basket. We know that 7 out of 10 people want both a guaranteed income for essential outgoings and flexibility in relation to non-fixed expenditure. We believe more blended approaches to managing retirement income incorporating guarantees, flexibility and potential for growth, will be crucial to delivering good outcomes, and there is a valuable role for trustees to play here.

“As an industry, we need to help get people into the right product or mix of products, at the right time, and to make sure people have access to products that can help them easily manage their retirement. We can see a limited role for CDC within this mix, but care needs to be taken so that the proper data is available before inadvertent decisions are made that could leave people with the worst of all worlds.”

Commenting on proposals to encourage greater use of CDC:

Claire Altman, Managing Director for Individual Retirement at Standard Life, part of Phoenix Group, commented: “It’s been encouraging to see the Government focus on the key issues underlying CDC adoption. However, pooling only works at scale and as well as the challenge of achieving and maintaining scale, there are potential risks of unfairness operating across income levels and geographies given the current design. There are also important considerations for employers, particularly in relation to the complexity of CDC and managing employees’ potentially incorrect expectation of guarantee. We are aware that many employers do not see CDC as something they want to engage in for understandable reasons – they have spent time and effort in ensuring auto-enrolment compliance and save for the most paternalistic of employers, there is no up-side to them of CDC.

“We think that there are better solutions that meet peoples’ need for growth as well as guaranteed income in retirement which although on its face are addressed by CDC in its current form are more sustainable and fair and give a better outcome as well as supporting the intention to invest in the economy. We will look forward to engaging in the debate on CDC and examine the extent to which its challenges can be overcome.

Commenting on the proposals to set out a regulatory regime for DB Superfunds

Kunal Sood, MD of Defined Benefit Solutions and Reinsurance, at Standard Life part of Phoenix Group commented:

“Superfunds may offer some schemes with weak sponsors and no realistic prospect of buying out in the insurance market an attractive alternative to buyout. However, it is important for any new regime to ensure that member protection is at the core, ensuring that there is no detriment to outcomes for members who are relying on their Defined Benefit pension scheme to provide a secure retirement income.”

Commenting on broadening the role of the PPF

Kunal Sood, MD of Defined Benefit Solutions and Reinsurance at Standard Life, part of Phoenix Group commented:

“Expanding the remit of the PPF could have the advantage of enabling some schemes to achieve the benefits of additional scale and efficiency when they may not otherwise be able to do so. However, as with all proposals, the focus should be on creating the best outcomes for members, and any potential changes will need to be carefully developed and targeted with this at front of mind.”



James Ikin
07519 556776

James Merrick
Standard Life
07974 063067


About Standard Life 

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of the Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • The value of investments can go down as well as up, and may be worth less than originally invested. 

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