Roy Porter by Roy Porter |

One thing our industry is very good at is giving members information. And we provide lots of it. In fact, sometimes I think we’re too good at it and all this information is actually to the detriment of pension savers.

It’s a bold statement to make, but I feel somewhat justified in making it following my attendance at a Pensions Age DC roundtable event and recent announcements from pension policymakers.

Let me give a few examples of where shorter, simpler communications might actually help savers.

The annual Chair’s statement, often found within yearly scheme reports, is meant to be a member- facing communication piece. It provides many important updates but, if we’re being honest, I doubt many members have ever read it. It’s simply become unwieldly for the lay-person with no real understanding of pensions. DWP’s recent report on the Chair’s statement is welcome recognition that it isn’t working as they had hoped.

Another document that’s expanded beyond its original purpose is the annual statement. That the DWP are looking to introduce a simplified annual statement for all DC pension schemes is, again, acknowledgement, that simply bombarding members with more information is not the right approach.

And let’s not forget, work is progressing on the pensions dashboard project – an online tool that, once launched, will provide a massive opportunity for savers to engage with their retirement planning in a simple and easy to understand way.

Of course, the idea of providing more information comes with good intentions. The theory goes that if we tell the story of how savers’ money is invested, the role trustees play in looking after it, how savers can boost their retirement pots, as well as steering clear of scams, savers will feel more engaged and confident dealing with pension matters.

But that’s not always the case.

There’s a realisation in the industry that savers need more help getting to grips with their pension. And what’s pleasing for me to see, is that this doesn’t mean throwing more information at them. Even when members become engaged, we shouldn’t expect them to be experts.

And for the engaged and non-engaged members approaching retirement, we can’t simply give them more information and assume they’ll make the right decisions. Our New Choices, Big Decisions research has given us a unique insight into the challenges faced by those approaching retirement as well as the decisions they typically make.

It revealed that:

  • Many older workers are ‘sleepwalking into retirement’.
  • Nearly three quarters of those interviewed (74 per cent) are spending their pension savings at such a speed that they’ll run out of money with, on average, up to a third of their retirement left.
  • Savers are scared of planning for the future as they don’t want to discover the ‘truth’.
  • They underestimate the financial risk of growing old and don’t understand how inflation can impact their savings.
  • The typical saver follows the path of the least resistance – they won’t leave a product or change a drawdown withdrawal rate once they have signed up.

These findings suggest that savers need help from the industry to get the best possible outcome for their individual circumstances. That help has to come in a variety of ways, whether that be with printed documents, online portals, financial advice or nudges through retirement pathways. This is no small challenge.

The first step has to be in giving members the right information at the right time and, importantly, in a way they can understand.

What I particularly welcomed out of my attendance at the roundtable event was how willing everyone across the industry is to deliver better outcomes for members through clearer, shorter and more concise communications. 

For those interested, a full write up of the event – where such topics plus more were discussed – can be found on the Pensions Age website.


This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.