Having an understanding of the different types of pensions you hold may prevent you from falling victim to pension scams or bad advice, and will also help you to make the right choices about your financial future.
Research conducted by YouGov prior to the pandemic found that a third of UK pension savers were worried about the safety of their pension savings. It is likely that this figure will have increased following the pandemic-related economic difficulties, including reports of insolvencies of popular high street brands and the impending challenges facing the labour market. The potential prospect of more corporate restructuring and insolvency events taking place will no doubt further heighten anxieties.
We’ve certainly seen a steady flow of calls from concerned pension savers since the beginning of lockdown, and we don’t expect these concerns to ease off in the near future. However, we want to reassure all UK pension savers - whether you are a member of a defined benefit or defined contribution pension scheme - of the statutory protections that exist to protect your financial futures.
We protect the futures of defined benefit (DB) pension scheme members by providing them with compensation if their employer fails and their scheme is unable to pay them their promised pension, and we are confident that we can continue to protect members’ futures for as long as we’re needed.
We recently worked alongside six of our industry partners to produce a simple guide that sets out all the various protections and advice that exist for all UK pension savers. The guide: ‘COVID-19 and your pension – where to get help’, answers commonly asked questions including:
- What happens to pension contributions if you are on furlough?
- Is my pension protected if my employer becomes insolvent?
- And, how can I protect myself against pension scams?
Savers, employers, trustees and others can now find all the information they need to know about pension protections in one place, helping to raise awareness of the protections that exist and provide a sense of security in retirement savings.
Also, events such as Pensions Awareness Live, which is taking place all this week to tie in with Pensions Awareness Day, offer an abundance of free information and impartial guidance to help you learn more about your pension so you can make the right choices about your retirement at this time of economic uncertainty.
Pensions can be daunting and sometimes the information you receive from your pension scheme may be complicated and hard to understand, so you can’t easily appreciate the value of your pension.
We want pensions to be accessible and easy to understand.
This is why we’re committed to not only delivering award-winning customer service, using simple language when we communicate with our members and providing straightforward online tools, but supporting events like Pensions Awareness Live, which we believe is critical in enhancing awareness and increasing engagement with pensions.
Crucially, effective member communications are not just important during the pandemic, but throughout the lives of pension savers – from first becoming a scheme member through to retirement. Education and understanding foster trust and reassurance in pensions, and it’s this peace of mind that we, alongside our industry partners, must provide to savers.
Sara Protheroe, Chief Customer Officer of the Pension Protection Fund.