This statement must include standardised and accurate data showing forecast pensions for at least two ages, for example 60 and 67, she said.
Baroness Altmann has supported the government’s recent consultation on a simple 2-page statement, showing each customer’s pension value, how much they have paid into it, how much has come from their employer and the Government, what charges they pay and how much their pension may be worth in future (using standard assumptions).
She said: “This is a vital first step in making pensions more user-friendly.”
She believes a simple, standardised statement should be mandatory for all providers and could be sent on pension savers’ birthdays.
Standardisation would enable PensionWise or other guidance and advice to work more effectively for consumers and “it is important that all pension providers, not just workplace schemes are required to produce the same standard statements for people’s pensions.”
She said Ruston Smith, QuietRoom and Eversheds have developed an “excellent simpler statement, which I believe should be made compulsory, rather than just relying on voluntary adoption.”
She has urged DWP not to bow to pressure for principles-based or descriptive approaches as these have failed consumers in the past.
She said: “Over the years, I have witnessed many examples of ‘principles-based’ approaches which left customers baffled and bewildered, because providers keep using old-fashioned nomenclature or jargon-based descriptors, which are unfamiliar to ordinary individuals.
“Standardisation and simplicity are needed in practice, not just in theory, so providers cannot obfuscate and continue to confuse consumers with non-standard wording and information.”