Wake-up packs are not helping members to make important decisions in the post-freedoms world, according to research from the Chartered Insurance Institute (CII).
The What consumers want report found these packs often landed on members doormats at the wrong time and tended to be "too content heavy" and were often dismissed as they were mistaken for annual reports.
Startlingly, a vast majority of 56% of the 1005 respondents surveyed expected to make a decision about how they would claim their pension just 10 months before their retirement date.
The report found that the current system of pushing out information packs at 30 weeks and then 10 weeks from the member's nominated retirement date no longer worked as customers had more options as a result of freedom and choice.
The wake-up packs were also seen as "too generic and too ‘marketing-like'," and left members unsure of the full range of options available.
They did not cover vital information such as market volatility, drawdown risks or the risks associated with keeping assets invested.
Furthermore, the information packs were designed on a one-size-fits-all approach and did not take into account life changes, such as the member leaving work, redundancy or illness.
Just 8% of the respondents were very knowledgeable about options available to them at retirement, while 55% claimed they were quite knowledgeable. Yet the research conducted by NMG Consulting and commissioned by the CII found that people tend to over-estimate their levels of understanding on the subject.
Pension calculators that determine income and expenditure in retirement were deemed essential by 43% of those surveyed, while 70% wanted to know the estimated value of their state pension.
Much earlier and simpler guidance would be needed to provide the right support structure for customers, while better signposting to government service Pension wise will help them make their own personal decision better.
NMG Consulting research partner Jane Craig said: "Our findings point strongly to the consumer need for earlier engagement in the process, to help them successfully navigate the new freedoms. Despite industry efforts, communications need to be further simplified.
"It must articulate succinctly what consumers really need to know to move forward on their pensions journey. More frequent, higher level and targeted communications from providers is preferred to a heavyweight ‘wake-up' pack that may land at the wrong time."
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