The DWP are going to launch at last the simple annual statement tomorrow (May 17th).
This is a personal triumph for Ruston Smith who has done more than anybody to make this happen.
It is essentially the same statement trialed at a PLSA conference four years ago. However it looks unlikely to include some key information.
I have complained on this blog that the statement would be better read if it included the costs and charges we pay for the services we have received. Ruston has likened this to getting a till receipt without the required payment and he is right.
I received Romi Savova’s comment yesterday (around the time the doorknob broke).
“In 2019 PensionBee became the first pension provider to adopt Simpler Annual Statements, providing customers with a short and clear overview of their pension. More than two years later and only a handful of providers have switched to the new format, to the detriment of consumers.
In 2020 we became the first provider to include charges in pounds and pence in our Statements, and have been campaigning for their inclusion to be mandated for several years. Past proposals have shied away from including costs and charges in the template and we hope to see bold action from the DWP. Full transparency on costs and charges is long-overdue and the inclusion of basic information pension savers deserve to be able to compare their pension pots is non-negotiable”.
We will see tomorrow just what has been left of the original transparency.
What is new?
There is now a definitive timetable for the delivery of these statements and crucially they look to work to a standard template. This is good news because comparing pensions using anything other than a simple standard template is a lot harder.
The proposed changes look set to come into effect in April 2022 and the word “require” features prominently.
The information on these statements can and should be the information we will see on the pension dashboard and though it will not show things like performance and the value people are getting for their money, it should get people thinking about three key issues
- How much should I be saving to be able to stop work?
- How do I best combine my pension pots?
- How do I get my money back to spend it?
Simple standard statements won’t do it all, but they will go a long way to getting people started. Pension Dashboards will help a lot and we have “only” got a couple of years before these dashboards start arriving.
There is a crack in everything (that’s how the light gets in) and right now it feels like some light is at last getting into pensions.
With Stephen Timms at WPSC, Guy Opperman at the DWP and with people like Ruston Smith helping them, pensions are moving towards a better place where people will be able to make more sense of the nastiest hardest problem in finance – paying yourself a wage that lasts as long as you do!