Providers 'must future-proof' pension products

This year’s Budget presented a huge opportunity for the industry to create these new products; however, Altus’ consultants have said that many providers are still not building these as efficiently and cost effectively as they could.

According to Altus Consulting, pension products will always outlive the technology they are administered on which means that the future proofing of new products becomes essential. Altus’ experience has shown that providers who keep old pension policies on outdated technology will end up with a significant cost burden.  Meanwhile, competitive and regulatory pressures are continuing to drive charges down.

Jon Dean, Consultant at Altus says:

"It is worrying to see that many of the new products being developed are still being built on 3 year business cases that never factor in the cost of moving them onto new technology. Pension policies will typically last through several decades, which is why it is essential for the industry to ensure that any new products being built to fill the annuity gap after the Budget are designed to last and are cheaper to run and cheaper to migrate."