Harrington: Government must help people understand pensions
Newly-appointed pensions minister Richard Harrington discussed pensions communication
The government needs to help people develop a better relationship with their pension, according to Richard Harrington, parliamentary undersecretary of state for pensions.
Speaking at the PLSA annual conference, he explained that many do not view their pensions in the same way as other high-cost investments. "They don't see it the same way they see their car, or their house," he said. "We want people to understand it's their own money, with a contribution from their employer and tax relief from the government, but all theirs."
What's needed is better communications and transparency around pensions options, he said, admitting he himself has grappled with understanding pensions in the past.
"[When I became pensions minister] I didn't know very much about my own pension, let alone anyone else's," he admitted. "I think this industry needs de-jargonising."
Harrington said better use of technology, so people could check their pensions on their phones for example, would help future generations and prevent pension statements from just "going in a drawer".
Harrington did, however, praise the pensions advice already on offer. "I have spent some time with Pension Wise [a government programme offering free advice on pension options] and I am very impressed," he said. "They are more than telephone operators. Many of them are experts in pensions, having spent 20 or 30 years in that field, and the advice they offer is very good."
Harrington's speech follows an announcement earlier in October that a single public financial guidance body responsible for delivering debt advice, money and pensions guidance to the public will be developed.
At the PLSA conference he added that he was pleased with the progress of auto-enrolment, whose opt-out rate is not expected to exceed 15% by 2018 according to Pension Smart. "Auto-enrolment has gone well, and I think the government is feeling pretty cock-a-hoop about it," he said. "Personally I'm wedded to it."