The price of choice


It is becoming increasingly clear that the progress of the auto-enrolment project is balanced at the fulcrum.

Until now attention has been focussed on the technical details surrounding the auto-enrolment process.

But we are moving towards a new phase where the primary focus will shift to the point of auto-enrolment, the business of saving money for retirement.

The reason is simple, until now the 43,000 employers who have staged have been familiar with this pension business. From now on, an increasing large proportion of the employers staging will have no experience of saving into a pension , either as owners or on behalf of their staff.

The business of diverting a proportion of the company profits for the staff’s benefit has been the choice of the boss. No longer! The boss has to fork out and what’s more, the success of the enterprise, in terms of the investment of the money, is in the boss’ hands.


The pensions industry has been busy rubbishing auto-enrolment as “all about payroll”for the past three years , but soon it will have to change its tune. To me auto-enrolment is more than an inconvenience , it is the main event for the 5m employees who have never been offered a pension.

For these people, auto-enrolment is very much about the pension. The prospect of 8% of a high proportion of earnings being paid into my account, even if I have to wait a couple of years to get up to full speed.

Which brings me on to the one choice the employer really has to make, the choice of workplace pension.

Those who are planning to default thousands of employers into workplace pensions are, in my opinion, making a big mistake.

It is taking the Michael to suppose that people will put up with being palmed off with “it’s all about payroll”. This is people’s money, money that will be available in years to come however people want it.

I don’t think for a moment that employers will pay over 8% of band earnings into something they know nothing about. They may do for a couple of months but sooner or later they will have staff asking exactly what is going on with their money.

So if you are planning to offer the employers you look after a default pension arrangement you need to be pretty sure of why.

You will need an audit trail that tells you why you made the choice that you did and why you didn’t choose other providers.

The price of this choice need not be high. Technology can analyse employer’s needs and put forward suitable providers prepared to make an offer. Technology can provide a digital report explaining why one provider makes sense to you and why others don’t.

The price of this choice is no more than a couple of hundred pounds and if you want your clients to make informed choices , rather than go with your choice, press this



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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