Auto-enrolment will continue to dominate the UK pensions agenda in 2013. Opt out rates will dramatically undershoot the 30% estimates that have been estimated as inertia proves to be a strong force.
Employers selecting pension providers in the second half of 2013 will find that it is no longer a buyers’ market, as capacity dries up and providers price accordingly.
There will be an ever increasing focus on pension charges, from regulators, legislators, employers and employees.
The number of over-65s still in the workforce will continue to increase as people choose to carry on working rather than retire on lower-than-hoped-for pensions.
The effect of the Retail Distribution Review (RDR) will see further consolidation in the adviser market and, longer term, possibly in the provider market, too.
Employers who haven’t thought about risk benefits when setting their auto-enrolment strategy will find themselves with uninsured liabilities
Employers will seek to derive greater value from their benefit package as part of the employee value proposition, which will result in greater choice and personalised communication. Innovative approaches to communicating benefits will also become more widespread – we expect to see wider use of games and social media.
Will Aitken is senior consultant at Towers Watson