The Pensions Regulator (TPR) has called for trustees to direct more members to support services such as MoneyHelper and Pension Wise, after recent research showed a lack of awareness of the organisations.
With the Pensions Commission’s 18-month investigation under way, TPR’s interim director of pensions reform Patrick Coyne has urged trustees to act now to improve support for members as they approach retirement.
In a blog post, he encouraged trustees to engage with members in order to “understand their goals, gaps, and preferences” and amend strategies accordingly.
Recent research from the Department for Work and Pensions (DWP) shows that just 9% of people aged 40 to 75 had heard of MoneyHelper, while 30% were aware of Pension Wise. Coyne called for these services to be signposted in “core communications” to raise awareness of the support available to members.
“Despite the availability of trusted services such as Pension Wise and MoneyHelper, awareness remains low,” Coyne said. “This is, in part, a reflection of the inertia-based… system created by automatic enrolment. Participation was built on savers not having to engage.
“That has had many benefits, but as savers move towards thinking about retirement planning, it does mean we need to rethink how we build awareness and support.”
He also told trustees to prepare for new initiatives and services such as pensions dashboards and guided retirement.
Coyne explained: “Pensions adequacy, as the government’s new commission shows, is the challenge of our time.
“For all of us, the spotlight must shift from participation to retirement outcomes – making sure pension saving translates into a decent standard of living in later life.”
DWP data sheds further light on retirement challenges
The DWP’s research – based on a poll of more than 4,000 people aged 40 to 75 – highlighted that less than a quarter (22%) of people who had not accessed their pension savings knew what they were going to do with the money.
A similar proportion (21%) “did not know they had to make a choice”, TPR’s Coyne said. He added that savers that were renting or who lacked other savings were more likely to be struggling to prepare for retirement.
“These cases are not rarities; they are an emerging norm,” Coyne stated.
The research also showed that people wanted more support, with around three in five saying that more support from government or pension providers would be useful.
“Greater awareness is the first step towards good retirement decision-making,” TPR’s Coyne said. “But awareness alone won’t be enough – we need new solutions which help support savers into the right retirement products for them.”
He urged trustees to engage with the ongoing targeted support consultation, and with the Pensions Commission, which was relaunched last month.
