Under current regulations, providers need to send customers a ‘wake up pack’ 6 months before their chosen retirement age. These packs essentially act as a nudge to get customers thinking about how they’d like to access their savings.
However, with more freedom and choice available to pension savers, Royal London believes the current approach means customers are potentially reviewing their options and making choices far too late. This could result in them making poor decisions.
How we’re changing things
From 5 February 2018, Royal London is taking additional steps to help customers plan their retirement journey.
Starting 5 years before the customer’s chosen retirement age, they’ll receive their first retirement engagement pack. They’ll then get an updated pack each year, just after their birthday.
When customers are within one year of their chosen retirement age, they’ll receive a new ‘wake up pack’ at both 6 months and 3 months before their chosen retirement age.
While the customer’s projected retirement income figures are updated in each pack, key messages will change at 2 years and 6 months. This is to take account of the different things customers should be thinking about with the limited time they have remaining.
How will these changes help customers?
We want our pension customers to really engage with their retirement planning. That’s why we worked with a range of customers to develop the new suite of pre-retirement wake-up packs.
Outlining simple steps, using clear visuals and plain English, the new material challenges the style of communication customers might have come to expect from pension providers previously.
Also, by having a longer time to discuss their options, we hope this will help more customers to truly investigate and understand all their choices and the potential risks.
Royal London believes that the best customer outcomes are anchored in impartial advice – so by providing the information to our customers earlier means that they will have more opportunity to thoroughly discuss their position with a financial adviser and ensure they are on track to meet their personal objectives.
We believe our new approach will not only improve engagement – but will also help our customers make more informed decisions, when the time comes.
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