Responding to a government consultation on the issue the mutual insurer said that while it supported the aim to improve customer communications, adopting a standardised, shortened format would lead to important information being left out.
Providing feedback on a sample statement included in the consultation the insurer said information on costs and charges needed to be included as well as the percentage return on the investments. The shorter format also omits key calls to action such as updating beneficiaries and that more needed to be done to signpost members to where they can go for more information.
The shortened format would also mean important information around the Royal London ProfitShare scheme, whereby a share of the company’s profits are added to customer’s pensions would not be included.
The cost of moving to a standardised format was also highlighted with the insurer estimating the costs could run to £3.6m with further costs for legacy customers. In 2017 Royal London comprehensively updated its annual benefit statements in line with customer feedback. The move has been greeted very positively with 95% of customers saying they found the information in the statement easy to understand.
Given that the Pensions Dashboard will soon become the main place people go to see all their pension information it argues against incurring huge costs re-designing paper statements that are already being seen as effective.
It added that adopting an industry-wide approach would mean that any necessary updates would be done by a “slow ‘by committee’ process and that is unlikely to be one that will include individual changes that will be important to our members.”
Commenting on the consultation, Isobel Langton, CEO of Royal London Intermediary, said: “While we certainly support the aim to improve how we communicate with customers we feel that taking an industry-wide standardised approach is not the way to go. Shoehorning the statement into two pages means important information on costs, charges and investment growth could be omitted. We also want the flexibility to include important messages such as the value of taking financial advice, our ProfitShare scheme and where to go to get more information. Adopting a more principles-based approach will enable us to do this.”
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