Friday 18 November 2016
Survey finds 48% of people are not confident of the tax rules regarding their pension
The Association of British Insurers (ABI) has today published a new guide aimed at ending the use of perplexing language around pensions in the wake of the pension freedoms.
Co-ordinated by the ABI, with the support of industry, Government and consumer groups, the ‘Making Retirement Choices Clear’ guide aims to make pensions language simple, clear and consistent to help customers better understand their options at retirement.
This guide aims to standardise the language used to describe options so customers can understand and compare products more easily without having to decipher technical terms.
Results of a recent survey by Populus found just 31% of respondents disagreed with the statement ‘The complexity of the language around pensions deters me from thinking about my finances in retirement’. The survey also found 48% of people are not confident of the tax rules regarding their pension. Only 26% reported themselves as being fairly confident.
The results of the survey clearly demonstrates the need to look at other areas of pension communications, such as the messaging around tax relief, to ensure customers take full advantage of both employer contributions and the Government top-up options.
The ‘Making Retirement Choices Clear’ guide proposes the new retirement options be explained as:
You can keep your pension pot where it is
You can take your whole pension pot in one go
You can take your pension pot as a number of lump sums
You can get a flexible retirement income
You can get a guaranteed income for life
You can choose more than one option and you can mix them
ABI Assistant Director, Head of Retirement Policy, Rob Yuille, said:
“The industry recognises that pension language can be confusing and is often a deterrent for people thinking about their pension. We want to help customers engage with their long-term savings plans so it’s important that we, as an industry, make these options as clear and comparable as possible.
“This is a responsibility not only for the industry but for anyone communicating with the public about retirement options. This guide could make a real difference by helping people to better understand their retirement options and make decisions that suit their individual needs.”
The Money Advice Service Pension and Retirement expert, Jackie Spencer, said:
“This guide is will bring much needed consistency to the way organisations talk about pension pot options, ensuring that people can gain a much better understanding of the retirement choices available to them.
“This will help them make decisions about their pension savings and retirement options which will ensure their money lasts for the full length of retirement. Information about retirement options can be found on the Money Advice Service Website.”
The ABI will be officially launching the new guide at the ABI Annual Conference on Tuesday November 22nd. You can see the guide here on the ABI website.
-ENDS-
Notes for Editors
Malcolm Tarling 020 7216 7410 Mobile: 07776 147 667
Lauren Gow 020 7216 7327 Mobile: 07889 641 702
Sarah Cordey 020 7216 7375 Mobile: 07860 189 071
