Government proposes pension passport system
30 July 2014
Pensions minister Steve Webb is reportedly considering the creation of a pensions passport to keep all of an individual’s retirement information in one place. This idea is intended to recognise the risk that people who amass several pension policies in the course of a working life could forget some.
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The days of working for one employer for life, and in turn having just one pension pot to keep track of, are long gone.
However, government initiatives such as pot-follows-member are trying to make life easier for people.
The government’s response to the Freedom and Choice in Pensions consultation confirmed it would work with the Financial Conduct Authority, The Pensions Regulator and other key industry stakeholders to consider how people can “quickly and simply access information on multiple pots in an easily usable format”.
LV= said it had called for a pensions passport in its consultation response to replace current “wake up” packs. Managing director, life and pensions, Richard Rowney said: “In order to help people better plan for retirement, we think the passport should set out key facts about their future minimum state pension and private pension and make them aware of the guidance guarantee.”
“If this information was provided in a standardised format, we believe that more people would engage with the retirement income market and the planning process. This would help to empower consumers to shop around and prompt them to start thinking about the options available to them, which in turn would result in improved customer outcomes.”
Not-for-profit pension provider B&CE also said it had campaigned for an online register of pension assets to be created, with chief executive Patrick Heath-Lay describing its creation a "win-win" for the industry.
“In light of the latest pot-follows-member proposals, regarding the creation of a number of federated databases and as well as the recent Budget reforms, this has only strengthened our view," he said. "The time has now come to put the member first and provide them with a one stop shop for their pensions information.”
"Pension providers spend millions sending pension statements and trying to find ‘lost and deferred pots’ - it would be far more efficient and effective if this was done centrally, which should include state pension information as well. Rather than having consumers being bombarded with too much information, such a service could bring together all people’s pension information in one place in an informative way."