Consumers continue to struggle to engage with their pensions...
Data from the FCA’s Financial Lives Survey show just 52% of UK adults with a defined contribution pension have read their annual pension statements. When it comes to reviewing pensions, the figures are even lower, with only 29% of UK adults with a defined contribution pensions reporting any awareness of the charges they pay, and only 18% of UK adults having reviewed where their pension is invested since joining.
… and levels of understanding within the sector are low when compared to other financial services markets
The Financial Lives Survey data shows just 32% of UK men and 22% of UK women said they knew enough to choose a pension product without getting advice (compared to 45% and 33% for mortgages). In addition, 26% of those who have accessed a pension in the last two years are unsure what type of pension it was (defined benefit or defined contribution).
Education levels have limited impact on consumers’ level of understanding…
Despite the debates surrounding the need for financial education in pensions, Financial Lives Survey data suggest understanding in pensions is largely independent of education level, with understanding of annual statements fairly uniform across most education levels.
… and evidence of a gender gap in the sector continues to emerge
Financial Lives Survey data also highlights a gender gap in pensions, with women scoring worse than men in their level of trust in pension providers. Women also rated pension products and providers lower in terms of satisfaction. This may be driving women to participate less with the sector, and evidence from the industry suggests that the pensions savings gap for women may have widened over the past 10 years.
Although many consumers are withdrawing from the sector at retirement…
The FCA’s Retirement Income data show 55% of pots are fully withdrawn in cash at retirement. Further work published in the ROR showed 52% of these pots end up back in savings/investment products, strongly suggesting consumers want to continue to save/invest but not in pensions.
The Sector Views report (January 2019) is available on the FCA’s website
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Recognised overseas pension schemes notification list 16 January 2019
The list of Recognised Overseas Pensions Schemes (ROPS) notifications has been updated.
The list is of schemes that have told HMRC they meet the conditions to be a ROPS and have asked to be included on the list. 4 schemes have been added and 1 has been removed.
An updated list of ROPS notifications is published on the first and 15th day of each month. If this date falls on a weekend or UK public holiday the list will be published on the next working day. Sometimes the list is updated at short notice to temporarily remove schemes while reviews are carried out, for example, where fraudulent activity is suspected.
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Relief at source Pension Schemes Newsletter 18 January 2019
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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