LV= has begun roll out of a new pension passport pilot, designed in conjunction with the Treasury, in a bid to boost shopping around at-retirement.
The Treasury unveiled the plans in late April, with then City minister Andrea Leadsom promising the work would complement services offered through retirement guidance service Pension Wise. LV= began sending the document to customers last week.
The passport has been designed in collaboration with Government ‘nudge’ unit Behavioural Insights, and will be distributed in lieu of traditional retirement wake-up packs to customers four and six months away from retirement.
Feedback from the pilot will be used to inform the FCA’s work developing an online Pensions Dashboard, first announced in December last year.
A generic sample of the new LV= document can be viewed here.
LV= had initially hoped the newly designed passport could be received by customers as soon as April to coincide with the introduction of pension freedoms.
An LV= spokeswoman says: “The focus of this initiative was to get it right for customers so that they can make the most of their fund rather than rushing something through that would not deliver the best outcomes.
“All those involved wanted to ensure that the information we provided savers was sufficient enough to encourage them to shop around for the right solution or combination of solution for their needs.
“As there are multiple types of pensions we wanted to ensure that the document we designed didn’t create a need for multiple passports which would defeat the aim of this exercise so we had to engage with occupational pension schemes. People spend a lifetime building up their pension funds and we want them to make the most of their pot so our focus was making sure that we were confident that the document we sent out would successfully achieve this.”
A Treasury spokeswoman adds: “We have been working closely with LV= and other stakeholders to develop a ‘pension passport‘ that will simplify and clarify people’s pension information, helping them to make an informed choice about their savings. The trial has started and will take place over the coming months.”
The launch comes four months after Scottish Widows began issuing its own simplified wake-up packs to customers in mid-March.
The Scottish Widows packs include a one page note including information on fund savings, as well as a 16 page booklet on what customers should do next.