Nearly two-fifths (38%) of small to medium-sized enterprises (SMEs) are likely to consider switching pension provider within the next three years, according to research by workplace pension provider People’s Pension.
Its survey of 500 SME decision-makers also found that almost a third (32%) of respondents cited a dip in investment performance as the strongest trigger for switching, with a similar proportion (31%) citing cost, and regulatory and policy changes.
A quarter (25%) said they would consider switching following a recommendation from a trusted adviser or peer, or because employees were unhappy with the service quality, reputation, performance or price.
Regarding what would reduce the likelihood of moving provider, nearly half (45%) said better communication or education for employees would make them less likely to switch. Two-fifths (40%) said additional employee support, including financial wellbeing provision, would have the same effect.
Stuart Reid, distribution director at People’s Pension, said: “Employers are under pressure to keep payroll and benefits running smoothly, often with limited time and resource to deal with complexity or inconsistent performance. When pension provision becomes a source of friction, switching quickly moves onto the agenda. Investment performance and cost remain fundamental, but expectations have evolved.
“Employers increasingly expect providers to deliver dependable service, clear communication and meaningful support for their employees alongside strong long-term outcomes. For providers operating at scale, that means combining robust governance and investment discipline with operational resilience and support that genuinely reduces the burden on employers.”
