Making pensions simple for everyone to understand is one of my key missions as a minister.
Simple, two-page, standardised pension statements, the pensions dashboard for online access to pensions information, an industry provided mid-life MOT are clearly the way forward.
Traditionally, pensions are complex. We want to change this. If something is impenetrable, people shy away from trying to understand it. And that’s why we need to make pensions easier to understand.
It was in this vein that I was pleased to welcome the work done by Ruston Smith, who leads the industry group working to improve practice across the sector to simplify the annual pension benefit statement.
This work is a guiding light for pension schemes. It shows how an annual statement can be made simpler by focusing on the needs of the saver. Making the information displayed straightforward and comprehensible must be our priority.
The new simplified two-page statement developed by industry and supported by government will help millions of savers to plan more effectively for the retirement they aspire to.
Building on simplified statements, we want to go further, and are backing industry to deliver a pensions dashboard that gives people a fuller picture of all of their savings, all in one place.
And we have introduced new rules that ensure that trustees tell their pension schemes members how they will take environmental matters into account when their money is invested.
The regulations will empower scheme members and drive innovation in the industry by improving the information on which consumers can make choices.
Crucially, that will help people understand where their money is going when they see their pay slip every month.
This will reassure savers that their money is invested in a way they would like, and build savers’ faith in the pensions industry – potentially motivating them to save more.
Automatic enrolment has transformed saving in this country, enrolling in millions of new savers. If we are to build on this momentum and secure the revolutionary progress made so far for future generations we need to build trust in the pensions industry.
These policies are designed to achieve exactly that. I am determined to make sure the pension industry is made more transparent and that it continues to grow and attract more new savers.
The simplified annual statement, the pensions dashboard, the mid-life MOT and the introduction of an understanding of what your pension fund invests in are important steps towards achieving this goal.
Guy Opperman is Minister for Pensions and Financial Inclusion.