Those approaching the age of 50 will soon begin to receive standard one-page ‘wake-up’ letters, setting out their pension options, under regulatory changes made as a result of the Retirement Outcomes Review.
These letters will be sent to those saving through workplace and private pensions.
While these new simplified communications have been welcomed by the industry, many have called for more to be done to ensure members engage more fully with the range of retirement options available.
Aegon says these letters will only ‘work’ as part of a longer staged engagement journey, that also signposts where people can get further guidance and advice as they progress from accumulating savings to taking benefits.
Aegon’s pension director Steven Cameron describes this letters as an important ‘small step’ but says more needs to be done.
He says: “While auto enrolment has been a success in bringing millions more into saving for retirement, the next big challenge, and it’s a giant step, is to get people properly engaged much earlier with their pensions.
“Under the previous regime, individuals might not have received relevant communications until they were approaching age 55. These latest rules from the FCA mean pension savers will receive a much simpler letter at age 50, referring to pensions freedoms, and highlighting key information and risks.”
“The challenge is making sure messages are meaningful, in the context of communications that have come before and which will follow and there’s a big benefit in issuing specific, relevant prompts at earlier ages.
“Regular communications have a role to play alongside other initiatives such as mid-life MOTs, the PLSA’s Retirement Living Standards and video summaries.
“As retirement approaches, communications should build in additional levels of detail to help people prepare ahead and in many cases seek advice to make the most of their hard earned retirement savings.”
