Scottish WidowsMay 17 2017

Scottish Widows to revamp pension statements

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Scottish Widows to revamp pension statements

Scottish Widows plans to shake-up the way it issues pension statements by shifting away from mainly traditional paper documents to 30 second videos.

Ronnie Taylor, distribution director of Scottish Widows, said the provider was utilising technology used by the provider’s banking parent Lloyds to make sure it more effectively communicates with pension savers.

Mr Taylor said Scottish Widows was aware pension savers did not engage with massive paper brochures giving updates on the state of their retirement savings pots but were willing to watch short video clips.

As a result, Mr Taylor said later this year Scottish Widows would test a 30-second pension video statement with a couple of employer’s workforces to see if this format increased their engagement with their retirement savings pots.

If the video was well received, Mr Taylor said it would be rolled out further.

When asked were the changes being made in light of the Financial Conduct Authority criticising the way providers disclose information about their products, Mr Taylor said it wasn’t prompted by this.

Back in 2015 the Financial Conduct Authority stated at-retirement communications needed to be changed to ensure clarity and simplicity for consumers.

The regulator stated: “We are keen to encourage providers, advisers and trade bodies to come together to agree and improve descriptions of key pension concepts and terms in a clear, non-technical and simple manner for use throughout customer literature.” 

But Mr Taylor said the videos were being put together not because of the regulator questioning the way providers communicate about pensions but in recognition of the way the public digests information in 2017.

He said: “The reason we are doing it is because employers and employees are asking for it.

“You do not get a stack of paper when you need to renew your gym membership. Why is this (pension statements) any different?”

When asked was there a risk that sending a video pension statement to an adviser’s corporate client’s workforce be viewed as poaching, Mr Taylor said intermediaries would be asked whether they were happy for Scottish Widows to send out the video.

He said the video would also flag that financial advice could be sought by the employer’s workforce.

In terms of future developments, Mr Taylor said the Lloyds-owned provider would consider personalising the video to include details about the size of the individual’s pension pot.

David Crozier, director and certified financial planner at Northern Ireland-based Navigator Financial Planning, said a 30-second video did sound a bit like a “gimmick.”

But he said it was clear savers failed to engage with massive paper brochure pension statements.

Mr Crozier said: “It is therefore well worth providers trying something new to increase engagement.”

emma.hughes@ft.com