One in three pension scheme members are saving more money after receiving the new-style pension statrment explaining exactly how much their pot is worth in today's prices, the FSA says.
In April 2003, the Department for Work and Pensions launched the Statutory Money Purchase Illustrations (SMPI) regulations, which requires scheme members must be given an annual statement of what their future pension may be worth, after taking into account the effects of inflation.
According to latest FSA consumer research (No.30), the launch of SMPIs has probed 37% of scheme members to increase the amount of money they save for their old age.
Some 62% also say they are planning to increase the amount they are saving for retirement in the near future, the FSA also says.
However, the research also shows that over half (54%) believe they will continue to make the same contributions as they did prior to receiving the new statement.
Another 6% also say they will stop paying into their pension and invest the money elsewhere, and 1% say they would stop paying into their pension and just spend the money.
Besides considering saving more or even less for retirement, the launch of the SMPI also seemed to have encouraged people to think about other steps they could take to ensure they will have enough money to live on when they retire, the FSA says.
These include considering retiring later, reviewing pension arrangements, and becoming less reliant on pensions.
When money purchase pension scheme members and personal pension policyholders receive a copy of their SMPI, they also receive a document from the FSA and OPRA, explaining:
However, only one in three (33%) remember receiving this information while four in ten (40%) said they only glanced at it.
More importantly, there were some respondents to the research who remembered throwing the FSA/Opra information sheet away because they deemed it "unimportant".IFAonline
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