You are here: Home - Retirement - Retirement planning - News -

Pension statements to get simpler in Govt overhaul

Written by:
The government is to introduce simpler, two-page pension statements to make it easier for savers to understand how their saving for retirement is progressing.

It is consulting on the exact plans this week, with the idea that people will engage more with pension saving if they can easily see the important information about the size of their pot in a simpler format.

The two-page document will highlight in clear terms the size of a saver’s current pension pot, and how much has been saved over the previous year. It will also make clear how much money the saver could have when they retire if they continue saving at that rate, and what they could do in order to boost the size of their eventual pot.

The focus will initially be on automatic enrolment schemes, with the intention of rolling out simple statements across all other pension schemes later on.

Guy Opperman, the minister for pensions, said it was clear that the current system was not working, with savers left befuddled by the complex, jargon-filled statements typically used by pensions firms.

He added: “Simpler statements will set a new standard for how pension companies communicate with their members. With more people saving for their retirement than ever before thanks to the success of automatic enrolment, it’s vital they can understand what’s going on with their hard earned money and actively plan for their future.”

Engaging with our pensions

Tom Selby, senior analyst at AJ Bell, pointed out that automatic enrolment had been an enormous success in getting millions of people to start setting money aside for retirement for the first time, but warned that the next challenge was to get them to engage with what sort of pension pot those contributions would deliver and whether it would be enough to meet their expectations.

He added: “In most cases, particularly where contributions are set at the minimum level of 8%, they will not.”

There have recently been warnings that many of us, particularly parents, should think carefully about whether we can afford to hike our pension contributions in order to provide a more comfortable retirement

Where can I get help?

Kay Ingram, public policy director at planning group LEBC, argued that a statement on its own is unlikely to be sufficient in encouraging people to save more than the minimum, noting that annual reviews ‒ which work rather like a financial version of a medical check-up ‒ help people feel more confident about their retirement.

She continued: “We believe many savers are perfectly aware that they are not saving enough to enjoy a comfortable retirement but don’t know how to access the help they need.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Chip to launch cash ISA and fixed term bonds

Chip plans to launch a cash ISA and fixed term deposit accounts later this year, as it reveals it achieved pro...
Chip to launch cash ISA and fixed term bonds

Last chance to bag up to £1,000 cashback via these investment platforms

A host of investment platforms are offering bonuses to new and existing customers of up to £1,000 cashback. Bu...
Last chance to bag up to £1,000 cashback via these investment platforms

Savers can now get a market-leading 5.07% on a one-year deal

Shawbrook launched a one-year fixed rate bond paying a market-leading 5.06% this morning, before being pipped...
Savers can now get a market-leading 5.07% on a one-year deal

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week