The simpler annual statement, and how we wrote it

by Joe Craig on

Why do we need a simpler annual statement?

Everyone in a defined contribution (DC) pension scheme gets an annual statement. This makes it a huge opportunity. An opportunity to help people make good decisions about their future. But people can only make good decisions if we give them the information they need in a way that they understand – and in a way that’s useful to them.

A dozen pages of impenetrable data isn’t useful. It just reminds people they don’t understand the financial world. Millions of people have been ‘nudged’ into pensions through automatic enrolment, but now we want them to make conscious choices and plan their future. What’s more, they’re most likely not getting just one statement. Your average DC member could have a dozen pension pots from different jobs they’ve done. If you’re going to really plan your future, you need to look at all of them. It’s our job to help people think about all their pension pots in one go.

People never ask for brilliant comms. They ask for clear, consistent, usable comms.

Some schemes do amazing things. But what members need is consistency across schemes. This statement is a common denominator. So it’s more useful than flashy comms that work only in isolation.

Members don’t want to be dazzled, they just want something they can trust. So we’ve come up with the Simpler Annual Statement. It fits on two pages. It’s easy to read, it’s easy to understand – and it’s fully compliant. We hope it will also be easy for lots of schemes and employers to adopt, which will make it easy for members to compare and combine pots, to get an overall picture of where they stand.

So, here it is: The Simpler Annual Statement – followed by some of the nuts and bolts of how we did it.

Download this statement as a PDF

How did we do it?

By using language people understand

Simple verbs can make a big impact. For example, it’s ‘what you’ve saved’, not ‘what you have contributed’. ‘Contributing’ money doesn’t necessarily mean you’ve got it. You might be contributing to some noble cause, whereas ‘saved’ resonates really well. When we tested it with pension scheme members, they got it straight away.

By changing the emphasis from what’s happened in the last year, to what you’ve put in and what you’ve got in total

That’s what someone should be thinking about when they’re thinking about whether a pension is a good idea. So we’ve promoted those figures to big, bold boxes at the top. After that, you can look at the detail of what happened last year.

By using something people understand to explain something they don’t

In our testing, members said, ‘Oh, I like this, it looks like my bank account.’ We’re using something people understand to explain something they don’t.

By using clear, colour-coded sections

We’ve made three sections: what you’ve got now, what that could give you in the future, and what you could do to perhaps give yourself a bit more. People loved this in the research. It also makes the statement very quick to read – in testing, under two minutes.

By helping people know what to do next

Each section of the statement gives people a steer about where to go to change things or how to find out more. People won’t be left with the feeling that their pension is beyond their control.

By turning small print into another way to help

We’ve cut an annual statement that might have been seventeen pages down to just two, and we’ve turned robotic small print into helpful and reassuring messages.

By challenging the industry to do better

We need a solution that helps schemes work together. Not by saying, ‘This is the excellence that we should aspire to,’ but by establishing a good, consistent way of doing things that everyone can achieve.

With the annual statement down to two pages, and the important figures in big, bold boxes, we can build on it and do even better. If people realise we’re charging them, we need to justify charges. If people see their investments go down, we need to help them understand investing.

Eventually, we can use this approach and this language on a pensions dashboard. But a statement is something we can do now. Let’s not miss out on good because great was over the horizon.


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