The Department for Work and Pensions (DWP) will issue its response to the consultation on the value for money (VFM) framework shortly, DWP ESG, productive finance and VFM policy manager, Des Healy, has said.

Speaking at a session on the framework at the PLSA Investment Conference 2023, Healy stated that, since the consultation closed in March, the department had received a lot of positive feedback.

“It really has changed our thinking, and hopefully you’ll see that when we do the consultation response,” he continued.

“One of the questions I was asked before I got here was: When will you be responding to the consultation? I can say it’s shortly. We are looking to respond shortly and take this forward.”

Healy noted that VFM was a complex subject and there will therefore be some areas that need to be given a bit more thought and more time needs to be taken to get some aspects of the framework right.

“But, hopefully, when you see the response, you’ll get a clear sense of the direction of travel and what it is we are trying to achieve as we move forward,” he added.

The department recognised that the VFM framework would need to evolve and it’s aiming to futureproof it, with Healy adding that, as the market changes, more consolidation occurs and as savers’ expectations change, the framework will need to evolve to reflect that.

“The framework won’t give us all the answers at the start, but I think the most important thing is where we are now will give us a good, strong base to build from, and hopefully it will lead to a regime that is really good for savers,” he concluded.

During the session a poll was held that highlighted the changing attitudes towards VFM.

Attendees were asked: In the past, what typically represented good value DC default investment during the growth stage?

Nearly two thirds (62 per cent) believed it was low cost, while 24 per cent said it was best return, 10 per cent cited good risk protection and 5 per cent believed it was high diversification.

A second poll asking the same question but for the future found that 76 per cent felt best return was what would typically represent good value, while the remaining 24 per cent believed it would be good risk protection.

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