The Simpler Annual Statement has been unveiled by Pensions Minister Guy Opperman at the PLSA.

Available online or on paper in just two pages, the Simpler Annual Statement illustrates the amount of the employer and employee contributions, the tax relief value and the total amount of money in the scheme. The statement signposts readers to more detailed information, such as costs and charges, that can be available online. According to Quietroom, this reflects legal requirements. The statement can also be tailored by providers using their own branding.

“Anything that makes it easier for the consumer to be more involved is a good thing,” Opperman said. “There has been a problem under successive governments, successive regulations, and successive organisations, that pensions have been inaccessible. It has been complex, difficult to grasp and people have not engaged with them in a way that all of us would have liked to have happened. There are a multitude of reasons for that but i think that is changing.”

He added that there is “light-years difference” between an ‘old’ statement and the new, simpler statement. “I cannot state enough how much i think the [Simpler Annual Statement] is the right way forward,” he added.

The Simpler Annual Statement was developed collaboratively by the DWP’s 2017 Automatic Enrolment Review Advisory Board co-chair and Tesco Pension Fund chair Ruston Smith, communication consultants Quietroom’s Vincent Franklin and Mark Scantlebury, and Eversheds Sutherland Karen Mumgaard and Francois Barker, in response to the government’s 2017 Review of Automatic Enrolment.

Opperman recommended that the Simpler Annual Statement harmonise “as much as possible” with the pensions dashboard. Smith agreed, stating that his “dream” for the statement is for it to be used as a basis for the dashboard.

Commenting on the statement’s development, Smith said: “We have a responsibility and the ability to help our members achieve the best outcome they can in retirement. By working collaboratively together, and by making statements and other communications we send them simpler, more readable and consistent across the industry, is an important step in our journey to engage with them.

“Short, simple, consistent statements are what savers ask for, giving them only the information that matters most – with clear signposting for those that want more information and get underneath the numbers. Having listened and learnt from savers, the Simpler Annual Statement has been developed to meet their needs.”

The Simpler Annual Statement was tested by Ignition House, who conducted independent research involving over 70 in-depth interviews and a survey of 1,000 scheme members. It found that the two-page Simpler Annual Statement is much clearer and easier to understand and that it can be read and understood in two minutes.

According to Quietroom, the Pensions Regulator (TPR), the FCA, the ABI and the PLSA have also expressed support for the Simpler Annual Statement, along with companies Legal & General, Aviva, Hargreaves Lansdown, Scottish Widows, Smart Pension, Pension Bee, NEST and The People’s Pension.

TPR chief executive Lesley Titcomb said: “We’re pleased to see industry come together to design an approach that meets our regulatory expectations and enables members to see key information about their retirement savings clearly and quickly. As more people start to build savings through automatic enrolment it is important that initiatives like this help people understand what they have saved and the importance of future savings to provide an adequate income in retirement. We encourage the trustees of any defined contribution scheme looking to improve its member engagement to take this new format on board as good practice.”

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