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 industry concerns 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 The Pensions Regulator on how we can make ‘pot follows member’ work.
“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.”
Tax Incentivised Savings Association director of policy Malcolm Small says: “Something like this, which could be used to make and receive payments and store records of pensions, could certainly help to boost engagement.”