View more on these topics

Radical card-based small pension pots solution floated

Independent consultant Helen Coulson has developed radical proposals for a card-based pension system which would allow people to manage their savings in a similar way to a bank account.

Coulson, who is a board member at the Centre for Retirement Reform and was previously vice president of strategic development at American Express, has developed the idea in response to concerns raised by the industry about the costs of implementing a new automatic transfer system for small pension pots.

Under her proposals, individuals would be issued with cards by their provider which would hold details of their pension savings. Coulson says the system would work in a similar way to credit card banking and could be used to facilitate low-cost, high-speed pension transfers.

She has written a white paper, at the request of the Department for Work and Pensions, detailing how the idea might work.

Coulson says: “I have been doing a lot of work with the industry, DWP, the FSA and TPR on how we can make ‘pot follows member’ work.

“There has been a discussion about building a huge database but it has become clear that that would be hugely expensive and wholly unsuitable.

“When you use a credit card in a shop and take the goods away, the money is taken from your account straight away. There is no reason that concept could not be transferred to pensions.

“So why not have the financial services industry design something like this for pensions which people can trust, engage with and want to use?

“I think the Government has to back the idea and if they do, I am more than happy to help make it work.”

Tax Incentivised Savings Association director of policy Malcolm Small says: “Bank cards and supermarket clubcards can hold huge amounts of information. Something like this, which could be used to make and receive payments and store records of your pension, could certainly help to boost engagement.”

Recommended

MPs call for QE inquiry

MPs are calling for an inquiry into the government’s quantitive easing programme amid concerns it has done more harm than good to the UK economy, according to the Guardian. Treasury select committee chairman Andrew Tyrie told the paper action must be taken as “some people may be worse off as a result” of the asset […]

32

Alan Lakey: The FSA is having a laugh at our expense

There comes a point where you realise that someone is having a laugh. This term is frequently hurled at football referees when their legendary myopia causes them to miss a player who is clearly offside or perhaps scoring with a sneaky handball. In this instance, I am thinking of the team that always wins, the […]

Ray Boulger
3

Ray Boulger: Future of interest-only is uncertain

One critical aspect where Nationwide’s culling of interest-only differs from earlier criteria tightening is the negligible impact it will have on interest-only applications to other lenders. This is because the amount of business Nationwide is now writing on interest-only is tiny. Only 3 per cent of its new business is interest-only and furthermore the vast […]

Andrew Tyrie: Put guilty bankers in ‘orange jump suits’

Treasury select committee chair Andrew Tyrie has called for bankers who are guilty of wrongdoing to face criminal charges to act as a deterrent to others. Speaking at a CityUK fringe event on financial services at the Conservative conference in Birmingham this week, Tyrie said it is “astonishing” that no one has been prosecuted in […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. When they get it into their heads that the issue isnt about costs, access to information or access to funds its about affordability.

    If you cant afford to save in a pension you wont!

    As usual IT is held up to be panacea for all ills – despite the fact that its online trading that caused a lot of the financial crashes in recent years.

Leave a comment