Speaking on today’s publication of the Guided Retirement Policy Consultation, Kirsty Ross, Product and Proposition Director for People’s Pension1, said:
“Delivering guided retirement successfully ought to strengthen trust in pensions by giving hardworking savers confidence that, when they retire, their workplace pension will provide a reliable and accessible income for life alongside the State Pension, without requiring them to navigate complex financial decisions at retirement that they are ill-prepared for.
“This significant reform, much like our decade-long New Choices, Big Decisions research, recognises that, while inertia has successfully supported pension saving through automatic enrolment, it’s unrealistic to expect millions of individuals to suddenly become retirement income experts when they reach retirement.
“Guided retirement should build on the success of automatic enrolment by carrying the benefits of good scheme design into decumulation. Clear pathways can help members turn pension savings into sustainable retirement incomes, while allowing those with different needs or preferences to make alternative choices that better suit their circumstances.
“Retirement defaults should form a scheme’s core retirement proposition, providing a trusted pathway to strong outcomes for members while maintaining straightforward routes for those who wish to do something different.
“At the same time, retirement default journeys should include clear consideration of members whose circumstances may warrant a more tailored approach, including those with particular health conditions, dependants, or wider financial needs.
“The consultation also provides an opportunity to support innovation in retirement income provision. Collective approaches, including Retirement Collective Pension Schemes (RCPS) schemes, have the potential to help deliver more sustainable retirement incomes by pooling risks and focusing on member outcomes throughout retirement.”
ENDS
Notes to Editors:
- People’s Pension is the largest commercial master trust in the UK based on members, serving more than seven million pension savers across the UK and managing £45bn in assets. It is provided by People’s Partnership, a business without shareholders, it reinvests its profits with the aim to help customers and achieve better financial outcomes for everyone. This assessment is determined by membership size. People’s Pension currently has more than seven million members, which, according to publicly available industry data, exceeds the membership of any other commercial master trust.