Interactive Investor

Set the alarm earlier on pension wake-up packs

18th May 2021 16:32

Myron Jobson from interactive investor

Loading

Share on

interactive investor comments on a call for input from The Pensions Regulator and the FCA.

Today, The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) have launched a new call for input asking the pensions industry how consumers make decisions about their pension at key points throughout their working lives.   

Moira O’Neill, Head of Personal Finance, interactive investor, says: “Time and again, our research has found that unexpected life events can derail retirement plans. There needs to be more tools to help people prepare their finances for both the best and the worst of times – but also for key life events that we might not have thought ahead for.

“Part of the solution is already there. Currently, pension providers are required to distribute at age 50, and every five years until the client’s pension pot is fully crystallised, a ‘wake up’ pack. These include a one-page headline document, setting out the options for people as they consider whether to access their retirement savings under the pension freedoms.

“But we think the alarm needs to be set far sooner, coinciding with key life events, and more engaging online tools should also play a part. They could be invaluable for those going through divorce, for example, to help ensure both parties do not find themselves short-changed at retirement, as is all too often the case currently. It could also prove useful to young adults who have started their first job after finishing university, because the sooner you begin saving, the more time your money has to grow. It’s time for more imagination, and we look forward to feeding back on this call for input.”

interactive investor Great British Retirement Survey

Last year’s survey revealed that unexpected life events wreck the pension plans of one in four

A significant number of people find that their financial plans for retirement suffer major setbacks from life events that are hard to plan for and mitigate. Nearly one in four of our survey respondents reported this happening to them. Illness and divorce were the most frequently cited reasons, along with redundancy, bereavement and caring responsibilities. Many described difficult circumstances that had devastated their retirement finances, with little opportunity to get back on track. Women and people with children were more likely to be affected.

The 2020 interactive investor Great British Retirement Survey was conducted by Core Data between February – July 2020 and more than 12,000 UK adults responded.

Take part in this year's survey here: The ii Great British Retirement Survey 2021

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox

Sign up for a free research account to get the latest news and discussion, and create your own virtual portfolio.

Free Sign Up