The UK is currently in the midst of a pension fund crisis. With state pensions now funded on a pay-as-you-go basis, the average life expectancy rising and the cost-of-living crisis worsening, pensioners are feeling the pressure. Consequently, we’re now seeing
a rise in private pensions, but these are not enough to resolve the issue. 

In addition, the current auto-enrolment process has created a disconnect between pension providers and their customers, causing a lack of meaningful customer relationships to be formed. As a result of this disconnect, savers are quickly losing track of their
pensions, with the value of lost pension pots now at an astounding £26.6 billion. Despite claiming to resolve these issues, the new pension reform announced in the Autumn Statement will do very little to address the current crisis.

The flawed ‘Pot for Life’ scheme

The ‘Pot for Life’ scheme will allow staff to choose which pension scheme their employers pay into, rather than the employer nominating a scheme on an employee’s behalf. This is a very ambitious proposal, but it fails to take the bigger picture into account.
For example, what will happen to individuals who change their careers often? Recent studies have shown that the average person will change jobs every four years. And with pension processes often considered an administrative mess, how can we be sure that our
pots will switch from our old employer to our new employer? 

These issues have been around for decades, and the Government is very aware of them. Yet, we are still waiting for meaningful changes to be made. The pensions market has been in stasis for far too long, with its issues left unresolved and fossilised. 

The new scheme claims that it will help consumers to be more engaged with their pensions. However, it seems like it will be another failure to launch, just like the Pensions Dashboard, which despite receiving millions in investments, has been pushed back
yet again to 2026. The promises made by the Government to consumers are piling up to new heights and have left consumers feeling fatigued. Instead of introducing another scheme that neglects to address the wider issues, the Government must take the time to
understand what consumers want and need.

How the Government should be addressing the pension crisis

In order for consumers to feel heard and understood, they must be at the centre of all pension decisions. Consumer awareness around this issue is still far too low, despite there being a strong incentive for consumers to be reunited with their lost pension
pots. Savers have not been adequately informed on how to find their lost pension pots, with many still relying on unsecured and ineffective communication methods such as post. However, not all is lost, as there is a middle ground here that allows customers,
pension providers and the Government to consistently and effectively engage with one another to put customers back at the centre of the pensions market. 

Should the Pensions Dashboard ever reach completion, it is not the solution to all the problems savers currently face. Pensions are only the tip of the iceberg for consumers who deal with multiple bank accounts, investment plans, and utility providers. We
have invested significant research and funding into a toolset that significantly surpasses anything that the Government has suggested so far and will allow consumers to take back control of their data. By leveraging brand recognition services, optical character
services, AI, and natural language processing, we can help consumers identify opportunities for better rates and services while offering a consolidated view of all accounts, including pensions. 

The Government has failed to deliver on too many promises and now is the time for consumers to be placed at the forefront of all initiatives and given the power to manage their pension pots. The tools that we need to make this a reality are already available
to us, and it is time that we start taking advantage to abolish the pension crisis for good.

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• Source: https://www.finextra.com/blogposting/25651/will-the-pots-for-life-scheme-solve-the-uks-pension-crisis?utm_medium=rssfinextra&utm_source=finextrablogs