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Pension statements aren’t clear enough

Retirees could be missing out on millions

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A leading pensions group has published a paper calling for changes in the way new retirees are dealt with by providers.

The Pensions Income Choice Association (PICA) is campaigning for personalised pensions statements to be produced for all people at the point of retirement. The statements would contain enough information for people to establish the best option, from a raft of alternatives. 

Optimising Value in Retirement also highlights the need for greater access to financial advice for people who have smaller fund sizes. It recommends the establishment of a register of financial advisers who are willing to advise on pension funds of less that £50,000. 

A new approach to pensions

Tom McPhail, chairman of PICA, said: ‘We need to change the way the retirement income market works in order that people are treated fairly and have the knowledge they need to make the choices that are right for them. This can be done without significant financial implications to the Government or financial services businesses, and the changes we’re calling for could have a huge direct benefit to hundreds of thousands of people in retirement, and therefore their spending power in the wider UK economy.

‘We need to support initiatives to help advisers deal with smaller pension pots and prevent providers from simply pushing their own products, regardless of their suitability or value.’

Which? says

Which? pensions expert Ian Robinson said: ‘We strongly support the open market option. People should be encouraged to shop around for the best deals and have access to independent advice.’ For more information see the Which? online advice guide to annuities.

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