The Society of Pension Professionals (SPP) has urged the Government’s proposed pension Value for Money framework to be directed to help savers, not just trustees, regulators and governance bodies.
It has called for the UK’s emerging VfM framework to evolve into a practical tool that helps pension savers make better-informed decisions about their retirement savings.
It published its proposal today in a new thought leadership paper, Helping Pension Savers Choose: Value for Money (VfM) in action.
The paper proposes a future “consumer-facing” phase of the framework, including simple pension ratings similar to food hygiene scores or energy efficiency labels, designed to help savers compare pension schemes quickly and confidently.
The paper explores how VfM information could be integrated into pensions dashboards, transfer journeys and retirement planning tools, while also highlighting the risks of “harmful switching” if savers move money based on branding or short-term marketing rather than long-term value.
Among its recommendations, the SPP suggests:
• Simple, standardised consumer VfM ratings;
• Greater focus on expected retirement income rather than headline charges alone;
• Behavioural testing with real savers before implementation;
• Stronger safeguards around pension transfers and consolidation;
• A phased approach to embedding VfM into consumer decision-making.
The SPP said it believes that, over time, a well-designed consumer VfM framework could become a key driver of competition based on long-term retirement outcomes rather than marketing strength or short-term performance.
Madalena Cain, deputy chair of the SPP DC Committee, said: “If the VfM framework is going to improve member outcomes then it can’t be just a technical reporting exercise for the industry. Savers need information they can actually understand and use.”
She said the challenge now is turning complex pension data into clear, meaningful signals that support both better decisions and better retirement outcomes. “This paper should help stimulate debate and shape thinking as to how this could occur in practice.”
The FCA Consultation Paper CP26/1 on the Value for Money framework was published in January. It will see DC pension scheme members given value for money performance information on a regular basis, including rating schemes on a four colour-coded basis in terms of their value.
The FCA plans, backed by other pensions regulators, could see poorly performing pension schemes forced to close with members moved to other schemes.