The voluntary Simpler Annual Statement has been developed collaboratively by Ruston Smith, Co-Chair of the DWP’s 2017 Automatic Enrolment Review Advisory Board and Chair of the Tesco Pension Fund, Vincent Franklin and Mark Scantlebury from communication consultants Quietroom, Karen Mumgaard and Francois Barker from lawyers Eversheds Sutherland – with the help of many within the industry.
Developed collaboratively by an industry group in response to the Government’s 2017 Review of Automatic Enrolment, was launched at the PLSA Conference in Liverpool.
Research conducted by the group found that the two-page Simpler Annual Statement is clearer and easier to understand and that it can be read and understood in two minutes – considered a huge positive. The statement clearly illustrates the amount of money someone has saved into their particular pension scheme, the amount their employer has contributed, the tax relief they’ve benefitted from and the amount of money they have in the scheme. Companies that support the launch of the Simpler Annual Statement include Legal & General, Aviva, Hargreaves Lansdown, Scottish Widows, Smart Pension, Pension Bee, Nest and The People’s Pension.
TPR chief executive Lesley Titcomb said: “We’re pleased to see industry come together to design an approach that meets our regulatory expectations and enables members to see key information about their retirement savings clearly and quickly. As more people start to build savings through automatic enrolment it is important that initiatives like this help people understand what they have saved and the importance of future savings to provide an adequate income in retirement. We encourage the trustees of any defined contribution scheme looking to improve its member engagement to take this new format on board as good practice.”
Alex Roy of the FCA said: “The FCA supports measures to make pensions more understandable for consumers, and understands the benefits of a simpler annual pension statement. We are always open to ideas which can deliver better outcomes for users of financial services. As such, we have engaged with the working group during the development of the statement and we’re supportive of its aims.”
Ruston Smith said: “Short, simple, consistent statements are what savers ask for, giving them only the information that matters most – with clear signposting for those that want more information and get underneath the numbers. Having listened and learnt from savers, the Simpler Annual Statement has been developed to meet their needs”.
PLSA director of policy and research Nigel Peaple said: “The simpler annual statement provides a refreshingly clear way of helping people better understand their future finances. Currently, some pension annual statements are far too lengthy and complicated and we know from our own research that half of people don’t understand them.
“The simpler annual statement, together with the Pensions Dashboard and the retirement income targets we are developing, will help savers have a much clearer idea of what they have saved for retirement and whether they are on track to live the lifestyle they want. We will continue to work with the industry to improve pensions communications and engagement and help more people get a better income in retirement.”
