10 February 2020

“Keep pension benefit statements simple – or we’ll legislate”

The government will consider legislation to make pension schemes simplify annual benefit statements, if they don’t do it on their own, says Pensions Minister Guy Opperman.

The warning has come after the government released a consultation paper on the simplification of workplace pension statements, with plans for shorter and simpler annual benefit statements, which are less intimidating and more likely to be read.

In the paper, the Department of Work and Pensions (DWP) wants to gather opinion on how to make statements shorter and easier to understand, while addressing three key questions:

  • How much money savers have in their pension pots?
  • How much money they could have when they retire?
  • How can they boost their retirement income?

It looks at how to deliver better annual workplace pension benefit statements that are shorter, simpler and will help members plan for their retirement aspirations and lifestyle.

Opperman wants pension providers to commit to giving savers clear information about their pension prospects, ideally on no more than two sides of A4.

He says: “Pension benefit statements are too long, too wordy, full of jargon and confusing for savers. People don’t read them, and if they do, they can’t make any sense of them. Simpler statements provide clear information that members will actually understand, and this will hopefully encourage them to save more.”

“I want pension schemes to drive forward real change quickly, but, if necessary, I’ll consider regulation.”