Life offices have hit back at the new secretary of state for work and pensions, after he demanded they “'adapt to offer value for money.”
Speaking at the ABI conference in London yesterday (4 July) David Gauke said: “I would encourage the pensions sector to see the potential that new savers will bring.
“By adapting your services to emerging trends you will better serve individual savers, by increasing the value-for-money they will reap from their retirement saving - a goal that we all share.”
Mr Gauke said providers should get to know the new pensions landscape.
He said: “It is about informing consumers and supporting them to make the right choices. Look at how you communicate with your customers, and consider adapting your products to the new types of saver entering the market.”
Steve Webb, director of Policy at Royal London and former pension minister, summed up the attitude of most of the insurers to Mr Gauke's comments, saying "providers are under constant pressure to drive up value for money for savers”.
Kate Smith, head of pensions at Aegon, also defended her industry: "There are clear examples of progress in the pensions and investment industry of firms adopting the latest technology to meet customer needs.
She added: “The growth of investment platforms in recent years has meant customers and their advisers can quickly view and monitor the performance of their investments.
"The pensions dashboard project will also provide people with quicker access to a clear overview of their savings which is a big move away from the traditional annual statement.
"More broadly, the industry is catching up with other sectors when it comes to customer engagement with regular emails and updates on issues customers should be considering and nudges for them to monitor their savings.
"Technology is enabling all of this and I think we'll see some interesting developments in the years to come."
Jamie Jenkins, head of pensions strategy at Standard Life also argued competition was a driving force “in providing value for money from retirement products".
Vince Smith-Hughes, head of business development at Prudential, said his company offers "excellent value for money for our customers and continually strive to improve our range of products and services".
However, Adrian Boulding, director of policy at auto-enrolment provider NOW: Pensions, agreed with Mr Gauke.
“As more industries are disrupted by technology and become more accessible for consumers, it is right that the pensions industry should also consider how to evolve to encourage new savers."
He added: “NOW: Pensions is part of the pensions dashboard project that allows people to see all of their pensions savings in one place, and we urge the government to get behind this project to ensure the legislation to get all pension entitlements shown on it.
"Government should include legislation for the pensions dashboard in the forthcoming Single Guidance Body bill.”