The Work and Pensions Committee is missing the point when it asks whether people understand the cost and value for money of their pension products – a recent FCA paper revealed that one third of those who opted for pensions freedoms don’t even understand where or how their money is invested.
This is due in large part to the sheer volume of documentation consumers receive related to their pension, which can easily mount up to 50 pages of hard text. When it comes to this, less is more. Services like Nutmeg and PensionsBee are noteworthy due to the simplicity and ease of their customer interface. Businesses should make better use of video and online experiences to connect with savers and provide them with all the information they need. That’s not to say that the FCA should stop looking into whether people understand the cost and value for money of their pensions – rather, if the industry needs an action, let’s focus on keeping it simple for investors.
As seen in Pensions Expert on 14/08/2018