Pensions ‘churning' in an industry-led personal accounts system, but which is not driven by intermediaries, could play an important part in driving down costs.
A new research paper produced for the Association of British Insurers (ABI), by Oxera Consulting, contains an economic analysis of the differences between an ‘industry’ personal accounts model and the National Pension Savings Scheme (Npss) - as proposed by Lord Turner in the second Pensions Commission report - including the effects on competition. ‘Churning’, or switching between pension providers, is currently seen in a negative light because it involves costs and is “driven by commission and IFAs”, says Reinder van Dijk, managing consultant at Oxera and author of the report entitled How ...
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