Pension experts gathered on Wednesday to discuss the implications of the recent legislative changes and worry how the UK public still seem disengaged from planning for their financial future.
IFA Magazine was invited to the event and heard a distinguished panel, and savvy audience, discuss how the public could be better engaged with planning their retirement.
The ‘Realising the Pension Revolution’ debate was organised by The Pensions Advisory Service and specialist communications agency Teamspirit, and took place at Portcullis House, Westminster. The panel was chaired by Richard Graham MP and Chair of the APPG on Pensions. Other members were Baroness Ros Altmann; Michelle Cracknell, CEO of The Pensions Advisory Service; David McCann, Head of Planning at Teamspirit Group; Sarah Pennells, personal finance journalist and consumer expert; and Caroline Rookes CBE, CEO of Money Advice Service.
The debate focussed on analysis from Teamspirit which showed that the introduction of pension freedoms promoted a 71% increase in enquires about pensions. It also revealed that the most important prompt to find out more about pensions is actually reaching retirement. What’s more, that two in five people don’t feel confident in making decisions around saving for their retirement.
One panel member pointed out that even though more people have woken up to thinking about their financial future after retirement, most still preferred to watch Netflix than reading up on pensions.
The main conclusion from the debate is that there needs to be less confusion for the public, some of it created by the pension companies themselves, which leads to people being “anxious” and “terrified.” The debate agreed that greater consumer engagement and simplified information, including dashboards, should be a priority of everyone in the industry.
Richard Graham MP and Chair of the APPG on Pensions, said: “The pensions landscape has seen a lot of change. This research shows the impact these developments, including pension freedoms, are having on consumer behaviour. It’s clear that government must work closely with industry to ensure consumers get the advantages offered and avoid the pitfalls. Long term saving matters.”
Michelle Cracknell, CEO of The Pensions Advisory Service, said: “Teamspirit’s analysis of our enquiry data helps us better understand the people taking action to find out more about their pension provision. The majority of consumers still find pensions complicated and find it difficult to take the action needed to make adequate later life provision. The introduction of pension freedoms has triggered a step change in awareness and engagement but there is still a way to go before people are confident on what is needed to secure their retirement.”
David McCann, Head of Planning at Teamspirit Group, said: “There has been nothing less than a revolution in the pensions sector in recent years, and consumers are reacting. The significant increase in enquiries to The Pensions Advisory Service since the introduction of freedoms has been alongside more than £5.9 billion being withdrawn from pension funds. This engagement could be viewed as a positive; people are reviewing their options and taking advantage of the opportunity to control their hard won savings. But, it could also be read as a loss of trust in the products and pensions industry to provide for the long term. At its heart, industry and government has a communications problem to resolve. The pensions industry has a responsibility to educate, empower and inspire consumers to take action with their finances to prepare for their future. This has never been more important so that today and tomorrow’s retirees can look forward to a financially secure future.”
Pensions Minister, Baroness Ros Altmann, said: “The pensions landscape has changed rapidly over the last year and it is important that people understand what the changes mean for them. It is important that people of all ages start planning for the future – not just those nearing retirement. They often need help in understanding how pensions work and The Pensions Advisory Service can provide valuable help.”
The full report based on the Teamspirit analysis will be analysed by IFA Magazine over the coming weeks.
