Pensions - Articles - Comment on Simpler Annual Benefit Statements consultation


Kate Smith, Head of Pensions at Aegon, comments on Simpler Annual Benefit Statements consultation

 “We welcome any initiatives which have the potential to improve savers’ understanding of their pensions and which nudges them into taking action. Simpler, consistent annual benefits statements are clearly part of the jigsaw to enable this, but so are a number of other initiatives, primarily pension dashboards, which once up and running from 2023 will enable savers to see a clear picture of all their pension savings, not just those from auto-enrolment.

 “It’s vital that the information shown on simpler annual benefit statements is consistent with that shown on pension dashboards. A lack of alignment will be confusing, defeating the purpose of trying to improve engagement. To avoid this, these two initiatives should be joined up, rather than approaching this very thorny issue piecemeal.

 “Increasingly the pension industry is moving to digital first communications, which tend to be more engaging, allowing information to be delivered in targetted personalised bite-sized chunks, incorporating tools, enabling savers to model personalised ‘what if scenarios’ and including signposting to further information. And many pension savers expect to access their pension information digitally on their phones, tablets and laptops. We strongly believe that digital annual benefit statements would work much better, with the potential of improving savers’ engagements and outcomes, than paper-based statements.

 “A massive fly in the ointment is that simpler annual benefit statements will only apply to defined contribution qualifying workplace scheme used for auto-enrolment. Many savers will have historical DC workplace benefits along with individual personal pensions, so will continue to receive different annual benefit statements. This isn’t likely to aid their understanding. The FCA is about to consult on ‘non-workplace pensions’ and may have a view on bringing individual personal pensions into scope.

 “There are a number of moving parts to be nailed down and many overlapping initiatives on the go. We believe a more joined-up approach is needed across government, regulators and the pension dashboard programme to give simpler annual benefit statements a better chance of succeeding. Delaying the implementation date by a year to April 2023 allows more time for a more joined-up approach.”

 https://www.gov.uk/government/consultations/simpler-annual-benefit-statements-draft-regulations-and-statutory-guidance

Back to Index


Similar News to this Story

What is in store for pension savers in Budget 2024
Ahead of the Chancellor’s next Budget speech, in just under two weeks time (6 March 2024), PensionBee gives its view on the implications for pension s
LTA abolished and replaced by 2 new lump sun allowances
This year’s first Finance Bill, containing the abolition of the pensions Lifetime Allowance and its replacement by two new lump sum allowances, is to
Industry comments on TPRs DB landscape report
Hymans Robertson, Broadstone and Isio comment on TPRs DB landscape report

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.