The Department for Work and Pensions confirmed today new rules simplifying disclosures for workplace pension schemes will come into force in October 2022 (Government response: Simpler annual pension benefit statements – GOV.UK (www.gov.uk))
Reformed two-page annual statements for automatic enrolment schemes will show:
- How much money the member has in their pension plan and what has been saved in the statement year
- How much money they could have when they retire
- What they could do to give themselves more money at retirement
Pensions minister Guy Opperman hopes simpler statements will “usher in a new standard for how schemes communicate with their members”
Pensions Dashboards have the potential to revolutionise retirement communications in the digital space
Tom Selby, head of retirement policy at AJ Bell, comments, “The Government deserves credit for attempting to simplify the information people receive about their pensions.
“Far too much paper is wasted sending savers reams of documents about their pensions that they simply cannot engage with.
“While some of this information might be useful in theory, the reality is it will often end up in the nearest bin. When it comes to retirement communications, less is often more.
“Slimming down workplace pensions communications to a two-sided piece of A4 paper should improve the chances of members taking an interest in their retirement pot. And while clearly the future is digital, there are many people for whom a paper statement will be the key form of communication they receive about their pension.
“Pensions Dashboards are the other key part of the DWP’s retirement engagement strategy. Once fully introduced, these hubs should allow people to view all of their retirement pots in one place online.
“Over time Dashboards could include key information on things like costs and charges, providing an entire generation with the tools they need to get the most from their hard-earned savings.”