23 June 2022
The PLSA has today launched a report called Retirement Choices: the evolution of products and support examining what steps have been made by the pensions industry to help savers make informed decisions about what to do when they retire.
Laura Myers, Partner and head of DC at LCP, who is also Chair of the PLSA DC committee and drafted the report foreword commented: "In one fell swoop in 2015 the pension freedoms thrust individuals to the fore in terms of the big decisions they need to make to sustainably fund their retirements. Many welcome the new flexibility, but with freedom comes more responsibility and therefore risk. There is no doubt that retirees would benefit from an enhanced level of guidance.
"Many schemes will not have the resources to develop what can be complex and costly solutions, and we are seeing increasing numbers of schemes seeking to partner with someone who can provide a full range of decumulation solutions. So, the demand is growing. However, when it comes to wider support (beyond just providing flexibilities) there is still a big gap.
"Auto-enrolment created a lot of small pension pots which commercially represent either very low margin, or wholly unprofitable business. This equation will need to right itself if we are to achieve a true mass-market solution which provides retirees the support they need. I don’t believe this will happen without contributions from all parties in the pensions world. In 2012 the industry, policymakers, regulators and consumer organisations all came together to lay the foundations for a workable accumulation regime; now is the time to bring the same key players together to put a decumulation regime in place that will provide retirees with the level of support they need. I am proud to be involved in today's report and look forward to seeing more focus on this across the industry.