Less is more: Drawing the line on DC fund choice

NEST's Mark Fawcett looks at the paradox of choice

clock • 3 min read

With more than 90% of auto-enrolled workers likely to stay in the fund they are defaulted into, where do schemes and advisers draw the line on fund choice? Mark Fawcett shares some insight...

Reducing consumer choices can greatly reduce anxiety, so argues psychologist Barry Schwartz in The Paradox of Choice. In his case, American shoppers were the group in focus. However, more defined contribution (DC) pension schemes are also recognising that fewer choices could make for less anxious auto-enrolled savers. How many choices are too few? How low can the number of alternatives go before it's at odds both with the regulatory guidance and what clients' workers need? Or is this less about the number and more about the variety a scheme's fund range offers? The consultation tha...

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