London, 20 April 2020: PensionBee has today launched a second iteration of the Simpler Annual Benefits Statement, which now includes individualised member pounds and pence costs and charges information. PensionBee is the first UK provider to do this. The statement is fully mobile-optimised and online only.
The Simpler Annual Statement template was developed collaboratively by Ruston Smith and Quiet Room and is supported by trade bodies, regulators and Guy Opperman, Minister for Pensions and Financial Inclusion, who was quoted last year as saying “I am 110 per cent committed to simpler statements and am pleased to see PensionBee adopting the simpler annual statement. I look forward to the rest of industry doing the same thing in 2019”.
However, since its launch, only a couple of providers including PensionBee have adopted a simpler statement. Using a consistent and standardised template that can be understood easily by consumers is an important way to increase engagement, demystify pension charges and drive higher contribution rates. All of which ultimately lead to better retirement outcomes.
As the first provider to introduce Simpler Annual Statements in 2019, PensionBee continues to pioneer change in the industry with its next iteration of the statement. Standardising statements to include pounds and pence charging is an essential part of engaging members, empowering them to compare fees across all their pots. This is even more essential as charges are unlikely to appear in the initial Pensions Dashboard data set, meaning it could be many years before people can significantly compare charges there.
Currently, providers are sending out around c.40 million paper postal packs each year, containing anywhere from 6 to 12 pages. PensionBee has estimated that paper statements destroy around 23,500 trees each year.
To address the low adoption levels of the voluntary two-page statement, lack of charge information and consistency of approach, the DWP has launched a consultation, with a view to legislating. The next stage of this consultation has, however, been delayed due to COVID-19.
Clare Reilly, Head of Corporate Development commented: “COVID-19 has already digitally transformed both our society and expectations. According to government guidance, trips to the post office should be avoided, and the dated paper-based business models of many pension businesses are being called into question.
We ask DWP to legislate to ensure that all providers send out digital-by-default, standardised, simpler annual statements including pounds and pence charging. No statement should be sent by post unless a member specifically requests it. More transparency in pensions will lead to consumer empowerment and increased competition in the market. If consumers are more informed about costs and charges, in a clear and jargon-free way, this will only lead to better retirement outcomes for everyone.”