Chancellor, Jeremy Hunt, has confirmed that he will continue to "explore" plans for a lifetime provider pension model as part of his 2024 Spring Budget, despite industry concerns surrounding the proposals.

Speaking during the Budget, Hunt stated: "At the earliest opportunity, subject to supportive market conditions and value for money, we’ll continue to explore how savers could be allowed to take their pension pots with them when they change job."

In addition to this, the Budget papers confirmed: "The government has confirmed that it remains committed to exploring a lifetime provider model for Defined Contribution (DC) pension schemes in the long-term.

"The government will undertake continued analysis and engagement to ensure that this would improve outcomes for pension savers, and build on the foundations of reforms already underway, including the Value for Money Framework.

The government previously launched a call for evidence on plans to offer employees a choice on their workplace pension provider as part of his Autumn Statement, which also looked at whether a lifetime provider model would improve member outcomes.

Under the initial proposed pot for life or lifetime pension model, savers would be given the option to ask a new employer to pay pension contributions into their existing pot, with similar approaches already taken by countries such as Australia.

Industry experts have noted, however, that the Chancellor's wording during the budget has shifted, and could be more in line with a 'pot follows member' model, rather than the initially outlined pot for life model.

However, a number of industry organisations raised concerns over the proposals and the potential burden this could place on the industry, arguing that the government should instead focus on existing projects, such as dashboards and auto-enrolment reform.

Member concerns were also raised, as industry experts warned that savers will be required to make complicated decisions, while the complex adaptations required could also result in higher fees for members.

However, saver interest in the initiative is more encouraging, as recent research from PensionBee found that 75 per cent of savers would consider opting for the government-proposed pot for life pension.

And despite industry scepticism since the call for evidence was launched, there are also proponents for the idea, with a pot for life industry lobby group launched earlier in 2023, urged the government to adopt its proposals as soon as possible.

Standard Life managing director for workplace, Gail Izat, also stressed the need to view the reiteration of a commitment to the introduction of a pot for life in the context of the wider Mansion House reforms.

"While pot for life could complement the current government and regulatory push for fewer, bigger schemes, which could help to ensure customer outcomes are a central focus and underperforming schemes are required to act, a pot for life scheme is not a short-term fix," he stated.

"Its successful introduction requires a significant level of planning and preparatory work to overcome the high level of complexity that has been built into our pensions system in the UK over the many decades of constant change to regulation and legislation.

"Australia provides the most clear template for this model but even there its introduction came from a less complex market backdrop and was the culmination of many years of reforms that consolidated the pensions system, created a robust data sharing framework and established high quality clearing houses.

“It's worth remembering that the UK is already on the journey to creating this infrastructure through other initiatives, like the pensions dashboard and small pots work but these initiatives must be completed before a pot for life system can become viable."

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