Get better at engaging – or else, warns UK’s largest pension provider

Pension providers which don’t offer customers the chance to understand what they are heading for in retirement risk falling foul of consumer duty, the managing director of the UK’s largest long-term savings and retirement business has warned.

Andy Briggs, managing director of Phoenix, said in a webinar this morning: “I think in the pensions industry, we are exceptionally fortunate to work in an industry where we can make such a big difference to customers and society.

“We have a big regulatory change in financial services at the moment, which is consumer duty. What the regulations used to say is that a financial services provider needed to make sure a product did what it said on the tin. This is changing to: you need to consider the outcome for the customer.

“If we don’t embrace our customers and offer them the ability to understand the outcome they are heading for with their savings, in my opinion we will not be embracing our regulatory obligations under consumer duty or indeed our purpose in society.”

Midlife MOTs are an important way to get people more engaged with their savings, said Briggs. “Having a society where only 10% of people get advice or guidance on the journey to retirement is not acceptable. We need to change that. Pension providers have a fundamental role to play.”

Jo Churchill, minister for employment, agreed with Briggs’ remarks, adding: “The MOT, I think, can do the things that an MOT on your car does. It gives you the confidence that you can get in and it’s safe to drive. And it gives everyone else on the road the confidence that you are safe to drive. It helps the employer and the employee.”

Making midlife MOTs more widely accessible to employees is the next challenge, said Churchill, who asked for industry feedback on how to reach small and medium-sized companies, and whether the government should target employers or employees.