The government has partnered with LV to start a ‘pensions passport’ trial next month, following the regulator stating last year that an alternative to the existing wake-up pack must be found to help reinvigorate the retirement income market.
The passport would replace the current lengthy disclosure documentation and wake-up packs sent by insurers, was first proposed by the Pensions Income Choice Association four years ago.
Speaking to FTAdviser, LV’s head of retirement propositions Phil Brown explained that the trial is with real consumers and will begin next month.
“The current wake-up pack is 10-16 pages long and the pensions passport takes the information on that and dilutes it into a single page. People will receive a copy of that and a copy of the Money Advice Service factsheet on retirement choice,” he stated.
It will list what kind of pension a consumer will be getting, “special things” such as guarantees, health notes and a signpost to the government’s guidance service Pension Wise, as well as to regulated financial advisers.
Mr Brown said: “We are trying to get people to think about shopping around and to become more engaged. They are currently not that engaged, but bringing it all down to one page may help with that.
He could not say what the outcome of a successful trial would be, but it is a “step in the right direction” particularly when looked at in conjunction with the FCA’s planned ‘pensions dashboard’.
The regulator’s retirement income report, published in December, proposed new measures including the dashboard and an alternative to the existing wake-up pack. It would enable consumers to view all their lifetime pension savings - including their state pension - in one place.
Mr Brown said: “Where this [the pensions passport] leads to depends on the regulatory direction of travel. It could end up listing two, three, or four pensions on the same page.
“The difference between building an integrated web page and this, is that a webpage would take a few years. This is immediate.”