February 16, 2026

V-FM Pensions #147: The podcast's response to CP26/1

1 hour 35 minutes

In this episode of V-FM Pensions, Darren and Nico chat through their thoughts on the FCA and TPR's latest consultation on value for money (CP 26/1).

In a must listen episode for anyone developing their response to the consultation, the duo's personal thoughts (not those of their employers...) include:

This isn’t Value for Money it’s a performance regime: The consultation has morphed into a capital-performance test with a costs add-on. Most of the “value” bits (service, engagement, member outcomes) have been kicked into the long grass.

It risks sabotaging the retirement-income agenda: Government wants schemes to deliver better retirement outcomes, but the VFM framework measures success like everyone’s just cashing out. That’s a recipe for schemes doing the wrong thing in the run-up to retirement.

The penalties are so harsh they’ll force providers to copy each other: Nobody is going to take investment risk, innovate, or deviate from the herd. The safest strategy becomes: hug the benchmark

Mansion House and VFM are pulling in opposite directions: Policy says: invest in private markets and the UK economy. VFM says: don’t you dare underperform your peers. Put those together and you get one outcome: providers won’t touch the assets government wants them to buy.

Costs and charges are still a mess, just with nicer spreadsheets: The consultation tries to build credibility through multiple “net” performance numbers, but exemptions, hidden costs, and inconsistent definitions mean the figures still won’t add up in the real world.

The whole thing dodges the real problem... people aren’t saving enough: VFM is starting to look like the policy equivalent of jangling keys in front of a baby, distracting everyone from the uncomfortable truth that adequacy and contributions matter more than almost anything in the framework.

...more

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