12 March 2013
Consumers are not yet getting what they need from Defined Contribution Pension schemes. That was the key message from Kay Blair, Vice Chair of the Financial Services Consumer Panel, when she addressed today’s Westminster and City conference on Decumulation Policy.
According to the Panel, more needs to be done to ensure members get a fair deal from their DC schemes. That means reducing complexity, addressing high and opaque charges and tackling the cost-effective treatment of small pension pots.
Kay Blair also highlighted the lack of consumer understanding over how much they need to save for an adequate pension pot at a time of falling annuity rates and growing life expectancy.
Kay Blair, Consumer Panel Vice Chair commented:
“People need to save more to ensure a decent income when they retire. The looming savings gap is at best in danger of reducing many people to an uncomfortable retirement and at worst poverty in old age. Increasing life expectancy and falling annuity rates combined with poor public awareness and low savings rates are leaving a gaping hole in consumer finances. With the continuing demise of Defined Benefit schemes, it is critical that more people are encouraged to save in DC schemes. Auto-enrolment is a positive move. But there are still far too many high charging schemes which eat unfairly into yield.
It is imperative that issues like value for money and effective scheme governance are addressed and that communications with consumers can be made in a meaningful way. And when it comes to decumulation, it is vital that people about to retire shop around and ensure they get the most appropriate annuity and the best deal. Members’ needs should be higher up the agenda and their expectations managed effectively. ”
Notes to editors
- Kay Blair’s speech is available on our website[1]
- Biographical details for Kay Blair and photographs in a range of resolutions are available on our website: http://www.fs-cp.org.uk/about_us/kay_blair.shtml[2]
- The Consumer Panel is a statutory body under the Financial Services Act 2012 and Financial Services and Markets Act 2000. It was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
- The Panel’s membership is drawn from a broad range of backgrounds with expertise including market research, law, financial services industry, financial inclusion, European Regulation, financial regulation, consumer advice, campaigning, communications, compliance and later-life issues.
- The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website.
- Panel members are appointed to serve a maximum of two terms of three years.