Guy Opperman says two page, simpler statements as well as an annual ‘season’ in which to issue them could be transformative steps for the UK pensions industry
Pensions are one of, if not the single most important investment that anyone will make in their lifetime.
Yet, for most people, the only engagement they have with their workplace pension is when they receive their annual statement - the once-a-year letter that details how their pension is working and where it is invested. Which is why we have set out our plans for creating a simpler two page pension statement, which will sit alongside personalised online pensions dashboards, so you can take control of your retirement.
For too many people their pensions statement is dozens of pages, utterly inaccessible and it's not even opened at all by many.
The proposals I outlined yesterday are to mandate for a new type of simple pension statement to be issued to savers.
This will be no longer than two pages and will give people the key information they need to get to know their pension by telling them; how much money is in their pension pot, how much money they could have when they retire, and what they could do to give themselves more money in retirement.
By introducing these changes people can better understand their pension savings and plan for the retirement they want.
I welcome the work that some pension firms have already done in this area, but overall progress remains too patchy and slow, which is why I want to act to deliver change.
I also believe that a statement season, building on the success of Pension Awareness Week, has the potential to build on the normalisation of workplace pension saving, provoke debate amongst the public and enable people to see how they pensions stack up overall. Government will therefore hold a joint responsibility with the pensions industry to drive forward a pension statement season.
Through automatic enrolment, we have more than 10 million automatically enrolled into a workplace pension to enable them to save for their retirement. Now, we need to make it easier for everyone to understand their pension, so everyone can have the retirement they want.
I believe these changes are transformative steps for the UK pension industry. They will consign dozen-page statements to the dustbin, bringing pensions into the 21st century.
Guy Opperman is minister for pensions
In the first of a five-part series of articles for PP, pensions minister Guy Opperman sets out how impending legislation will improve pensions for members.
Tim Shepherd and Beth Brown look at the legal implications of working from home and how pension professionals can mitigate the risks.
The Pensions Regulator (TPR) has substantially increased the usage of its powers against trustees – posting a sharp rise in the use of formal information gathering powers and High Court production orders during the three months to the end of September....
The Pension Schemes Bill has completed its third reading, crossing its latest hurdle in the House of Commons.
An amendment to the Pensions Schemes Bill which would have seen people given a pre-booked Pension Wise appointment ahead of accessing their retirement savings has been defeated.