People approaching retirement are being sent a new 'pension passport' document, which is being trialled as part of an initiative to get people thinking about their pension options earlier.
Insurer LV= has teamed up with the Treasury to create the supposedly jargon-free document, which could replace the traditional 'wake-up packs' sent out.
The pension passport
LV=’s pension passport is a simple single-page document that spells out where a pension saver stands.
It shows how much a pension saver has in their pot, what type of scheme that money is in and any special terms their pension attracts such as guaranteed annuity rates.
There’s also three steps on ‘what to do next’ including recommendations to visit the government's Pension Wise website and book an appointment with the service to receive free guidance.
You can see an example of what the pension passport looks like below.
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Carefully designed
LV= says it has worked with the Cabinet Office's behavioural insight team to ensure that the information it provides in its pension passport is sufficient to encourage pension savers to shop around for the right solution or combination of solution for their needs.
This is especially important given that new pension freedoms mean savers now have more choice about how they take an income from their nest egg.
Phil Brown, LV= head of retirement proposition and change, said: "People spend a lifetime building up their pension funds and we want to encourage them to make the most of their pots."
A Treasury spokesperson said: “We have been working closely with LV= and other stakeholders to develop a ‘pension passport‘ that will simplify and clarify people’s pension information, helping them to make an informed choice about their savings.”
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Will other firms offer one?
LV= is the only firm trialling the pension passport with the Treasury.
But if successful it could mean other pension companies adopt a similar type of document to send to retiring savers.
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