Pensions industry needs better savings culture
06 December 2016
The Pensions Minister, Richard Harrington outlines what he expects from the pensions industry in order to create a better savings culture.
Richard Harrington writes in Pension Expert that one of the key challenges we face now is how we best explain the pension reforms and what they mean for the ordinary saver; for him, getting this communication right is crucial to ensuring people are empowered to make the right decisions so that they can enjoy a financially comfortable retirement.
Connected with this, one of the most important priorities for the Minister over the coming months is to continue the successful roll-out of automatic enrolment, building on the success already seen.
Increase members' engagement through better tools
The Minister said that if better, more dynamic tools were provided, we could help millions of savers see more easily that the money being saved is theirs and is growing. He also wants to help people understand the benefits of remaining in the pension scheme set up by their employer and emphasised the need to help people interact with and understand what is being put away on their behalf.
Pensions are often seen as too complicated and savers just leave others to get on with it, without keeping check on how much is going into their pension. The Minister wants to change this, and says his vision for pensions is to get people taking more ownership of their own money.
Richard Harrington said, “If better, more dynamic tools were provided we could help millions of savers see more easily that the money being saved is theirs, is growing, and is simply deferred pay for when they choose to retire.
My challenge to all pension providers is to consider how you can boost transparency for your customers. If we can get people interacting regularly with their savings, I believe we can further entrench the culture of saving that we are developing across the country.”