Pensions minister Guy Opperman has acknowledged the controversy around his idea of a pension statements season but has stuck by it saying it will give savers a better understanding of their savings.
Speaking to the Work and Pensions Committee yesterday (November 8) as part of an inquiry into pension freedoms, Opperman said his idea of having a statement season, where everyone receives their pension information at the same time, was “controversial” for some but was nevertheless a good idea.
He said it would help give people a better understanding about what they will have in retirement.
Opperman said: “My idea is that we should do what we already do with tax, exams, A-levels, university and what we do with a whole bunch of strategic decisions that occur in our lives.
“We should have an annual period of time, and there is an argument over how long it should be as it has to be a month or so, when you receive your [pension] statement.”
Opperman said he wanted it to become a normal situation that people would meet in a place such as a pub and have a frank conversation about their pensions.
He said: “I would like it to be the case where we actually have a situation where people would meet in a pub or another sort of establishment and go ‘I got my statement, do you understand yours?’, then they actually have a discussion about this and this becomes a thing.”
Some in the industry have gotten on board with this idea, with Mark Locke, communications director at the Lang Cat tweeting: “The pensions minister wanting people to speak about their pension statements in a pub or similar setting is not crazy. I’m with him on this.
“And maybe if more people in financial services were too, pension statements would be developed and improved a bit faster.”
But others were sceptical with Steve Webb, partner at LCP, saying the idea of a statements season to drive up engagement “is naïve in the extreme”.
Webb added: “It is a waste of legislative time to prioritise this over more urgent measures like automatically combining small pension pots. With a pensions dashboard coming, the vast majority of people of working age will be able to see all their pensions in one place whenever they want.
“A twin-track approach of combining small pots and making pension information easily available on a dashboard will have far more impact than hoping people will take piles of pension statements with them on their next visit to the pub.”
But Opperman said the government was not pressing ahead with this idea straight away.
There is a working group made up of industry and the Department for Work and Pensions which is looking at how the idea can be taken forward.
“It is my intention though...longer term to introduce a statement season because my personal view is it is a good thing that everybody gets their particular pension statement at roughly the same time,” Opperman said.
But he did acknowledge there will be complications with the season as schemes and providers will have to get all this information out at the same time and respond to it.
Opperman said: “There will be some degree of a burden by reason of that but in my humble opinion it is better that we introduce this so we have a better understanding.
“Then the government can get behind an advertising campaign and we can actually make it a thing so that people get better awareness.”
amy.austin@ft.com
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