Nest and UK private pension plans could face competition from foreign providers keen to infiltrate the British market with low-cost solutions, pensions lawyer Robin Ellison has warned.
The senior partner and actuary at London-based Pinsent Mason told delegates at the Corporate Adviser Summit that countries with strong track records in bulk direct to market pension provision, such as the Netherlands, Denmark, Sweden and Australia, could begin offering solutions in the UK in the near future.
“We are beginning to see now that the foreign are coming in. We are beginning to see the Dutch and the Danes, who have similar kinds of systems running in those countries for several years, beginning to test the market in the UK,” he said.
“My guess is that we will see private alternatives to meet the competition from the existing providers in this country who are not used to selling ’pile- it-high-sell-it-cheap’ solutions since the man from the Pru. Foreign companies will come in and my guess is they’ll do a pretty good job.”
But Trevor Severgini, chief executive of corporate adviser firm Johnson Fleming, said transplanting foreign pension solutions could be harder than expected because of socio-economic and cultural differences and attitudes towards savings in the UK when compared to other countries.
“We are going to see an every-increasing level of globalisation but different countries don’t all sing from the same song sheet and it is not as simple as ’one size fits all’.”