Pensions minister: Simple statements are long overdue

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.

Recommended

5

Fears protection commission disclosure will turn clients off advisers

As new disclosure rules bring the full extent of protection commissions into the spotlight, experts are asking if this will see clients ditch their advisers in favour of execution-only services. Under the Insurance Distribution Directive, from 1 October advisers have had to provide clients with information before a product sale about any commission received, which […]

Lessons to be learnt
1

Advisers ditch online CPD in favour of events

Advisers prefer to fulfill their continuing professional development requirements by attending events rather than engaging with online learning materials, research from Prudential shows. The Prudential Adviser Barometer shows 60 per cent of respondents said events was the best format for CPD last year, rising to 63 per cent this year. While 44 per cent were […]

11

FCA confirms PI policies cannot exclude FSCS

Advisers’ professional indemnity policies will no longer exclude Financial Services Compensation Scheme claims, the FCA has confirmed today. Some current PI insurance policies have excluded the FSCS as a claimant, or exclude claims where the firm provider or fund has become insolvent. Following feedback from a July consultation paper however, the regulator confirms changes to its handbook […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Hi Guy,

    As someone who regularly explains pensions in general to large groups of employee’s (both public and private sector) covering DC, DB and state pensions, I can definitely confirm that in less than 2hrs, people go from understanding virtually nothing, to feeling like they do understand their pensions and their purpose.

    The key is a little education and were employers and schools encouraged to provide that modest education, people’s general understanding, engagement and knowledge would increase massively more than any changes you could ever make to statements would do so.

    • A good suggestion, though what must be borne in mind, as reported by Ros Altmann after she’d stepped down, is that the role of Pensions Minister is very strictly controlled by the Treasury and any holder of the role who dares to speak his/her mind, e.g. by making waves about abolishing the LTA and/or the tapered allowance for high earners or actually trying to simplify the whole tangled quagmire of pensions, would swiftly find himself (metaphorically) hung, drawn and quartered.

  2. I’m not sure that “new rules that ensure that trustees tell their pension schemes members how they will take environmental matters into account” is making statements simpler. The reason statements can get complicated is because government and regulators keep adding “new rules”.

  3. Hmm, Pension Simplification from Govt., that’s novel

  4. Where do you plan to start Mr Opperman?

  5. Not sure about environmental impact information makes it simpler.

    Also with a two page statement, what will be chopped out.

  6. Actually, Mr Opperman, it’s not simple statements that are required, it’s simple RULES. Do you understand the difference?

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com