Opperman says Nest sending ‘message to the rest of the industry’ on transfers
19 August 2019
Guy Opperman, Minister for Pensions and Financial Inclusion, has praised Nest joining the STAR Initiative, as “great news and overdue”.
STAR is the industry initiative aimed at improving the outcomes for individuals who want to transfer their assets, such as pensions and investments, by shaping recognised, industry-wide standards to promote good practice in transfer, thereby driving down pension transfer times. It commits pension schemes to working towards reducing most transfers for defined contribution (DC) schemes to less than 21 days, and to promote regular reporting of average transfer times.
Nest brings 8 million pension pots to the STAR initiative.
Opperman said: “I’m glad Nest has signed up to the 21-day transfer pledge. Nest looks after the pensions of millions of people brought into retirement saving by automatic enrolment, so clearly it is important they send a message to the rest of the industry.
“Others need to act urgently to join them and show that they care about their customers, or face being ‘named and shamed’.”
Consumers and advisers can find pension and investment switching difficult, often because of the time, complexity and cost involved, which creates barriers that may result in consumers staying with products or platforms that no longer meet their needs, or which offer them poor value for money.
This week (22 August) the ABI is hosting a pensions working group, at which there will be over 30 organisations, including Nest, coming together to share ideas and collaborate on developing industry best practice and problem-solve to reduce transfer times.
Mark Rowlands, Nest’s director of Customer Engagement, said that in joining the STAR initiative Nest wanted to share its experience to help other organisations reduce their transfer times.
“While we’ll continue to offer quick transfers*, we also want savers to have clear and easy to understand information to help them make informed decisions about their pension scheme – from transfer charges to how the scheme operates, from future investment prospects to past fund performance.
“At Nest we’re committed to transparency and improving our service for our eight million members. We are looking forward to working together with colleagues across the industry to influence how good-practice is defined. Reducing transfer times is an industry-wide challenge and one we’re eager to be involved in.”
Tom McPhail of Hargreaves Lansdown and chair of the STAR Steering Committee, said: “We are delighted that Nest Corporation is supporting the STAR initiative, bringing with them such a high volume of consumer pensions.
“We are pleased with wide-ranging and extensive industry support we have received and continue to receive. Frankly the more organisations that become involved, the firmer our foundations are and the more momentum we have.
“We have begun to collaborate at our steering and working Groups which will help galvanise the industry to forge ahead with change and to improve things for consumers.”
* More than 90% of Nest’s transfers use the Origo platform. For these, Nest’s average transfer time is 12.2 days. This was released in July 2019 as part of the Origo Transfer Index.
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