• The Department for Work and Pensions has today published a consultation on measures designed to improve retirement communications to pension scheme members
• Government seeks views on a range interventions, including sending information in orange letters, targeted at increasing member engagement
• Paper acknowledges the advent of Pensions Dashboards provides an opportunity to rethink the way information is presented to savers
Tom Selby, senior analyst at AJ Bell, comments:
“Boosting engagement is the next big pensions policy battlefront following the successful introduction of automatic enrolment.
“We know through various behavioural economics trials that the way information is presented to people can have a significant impact on the decisions they make.
“At the moment we have a system which requires huge volumes of information to be sent to members - information which is often either ignored or causes confusion for those who actually read it. App-based technology is changing the way we interact with our finances and has the potential to push through a genuine retirement engagement revolution.
“In that context now is the right time to think radically about how communications can be simplified to the benefit of members, with digital platforms at the forefront.
“Aiming to move to a one or two page document for paper-based statements – which will remain an important part of the landscape, particularly for non-internet savvy customers - is the right approach, and innovations like an orange envelope could help get over the first hurdle of getting members to open their pension statements in the first place.
“It is vital the Government works with all relevant regulators, including the FCA, to ensure the information requirements are consistent across different types of pension scheme.”
