Today (15 September) marks Pensions Awareness Day 2020, and whilst the campaign may look slightly different, and virtual, this year, it is still clearly needed, with industry experts backing the campaign in light of the retirement income and knowledge gaps still facing many savers.
The annual campaign, undertaken by Pension Geeks, shifted to an online event this year amid the Covid-19 pandemic, with support from key sponsors Aegon and Royal London, as well as the Department for Work and Pensions, the Money and Pensions Service (Maps), and the Pension Protection Fund.
Now Pensions has joined the campaign as partner sponsor of Pension Awareness Live 2020 and will be presenting a ‘takeover day’ later in the week to discuss pension education and the gender pension gap, with previous research having revealed that women’s wealth is less than a third of men’s when they reach retirement.
Meanwhile, key sponsors such as Aegon will be running online sessions to go “back to basics on all things pensions”, whilst Royal London has today announced its Secret Life of Pensions Campaign, after research revealed that 72 per cent of workplace pension holders have little or no knowledge about pensions
Maps has also announced an additional virtual Pension Wise session in light of Pensions Awareness week, as it revealed that more than 3 million over 50s were planning to leave retirement planning until the final two years before retirement, or not plan at all.
It is not only financial organisations backing the campaign however, with Make My Money Matter campaign partnering with WWF and Silverback Films to launch its film Our Planet: Too Big to Fail.
The film, which has contributions from Sir David Attenborough, former Bank of England overner, Mark Carney, and film-writer and director, Richard Curtis, aims to explore solutions for building a “thriving, more resilient economy in the wake of the pandemic”.
However, industry experts are not only seeking to engage members with their pensions to improve contribution levels, but to address growing concerns over scams and misinformation.
Canada Life published findings that showed over a third (36 per cent) of UK adults are worried about a scam, compared to 26 per cent in May.
The provider highlighted that pension fraud is the second most common type of scam, with over one in four (28 per cent) of people stating this type of scam, whilst banking related scams were most common (38 per cent).
Canada Life technical director, Andrew Tully, emphasised that the “scamming frenzy appears to be gathering pace” as scammers use the “cover of Covid-19”, warning that there are not only costs to victims financially, but also to their sense of trust and mental health.
He added: “Despite the public message campaigns and the ban on cold-calling, the scammers are either simply ignoring the law or using increasingly sophisticated ways of finding convincing ways to con people.
“The rise of romance scams and using the Track and Trace service only serves to show we all need to be vigilant, scam aware and follow the simple rule of thumb – if it appears too good to be true, it inevitably is. Simply walk away, hang up, or delete the email or text.”
These concerns were echoed by Phoenix Group risk and financial crime manager and Pension Scams Industry Group (PSIG) deputy chair, Tommy Burns, who stated that whilst Pensions Awareness Day aims to help people to get the most out of their pension savings, that opportunity is “lost” if they fall victim to a scam.
He stated: “Worryingly, financial fraud is growing, partly as a result of Covid-19, with scammers taking advantage of the upheaval and the additional financial pressures that some people are facing.
“Pension scams can destroy people’s lives and rob hard-working pension scheme members of the retirement they have worked towards for years.”
Burns highlighted that whilst the industry has called for “pivotal” amendments to the Pension Schemes Bill to provide trustees with greater powers to prevent pension scams, savers themselves also need to be “vigilant and aware of the threat”.
He added: “One of the very best ways to avoid being scammed is to learn more about the risks and to recognise when alarm bells should be ringing. While fraudsters’ methods are constantly evolving, there are some common traits to pension frauds. We all need to learn more and be vigilant.”
The Pensions Regulator has also been supporting Pensions Awareness Day with the promotion of Scam Man & Robbin, the computer game designed to help consumers to spot pension scams.
Industry experts have used the campaign as an opportunity to highlight actions that consumers could consider to improve their future retirement planning, as well as the importance of seeking financial advice.
For instance, Moneyfacts finance expert, Rachel Springall, stated: “Clearly it is vital consumers take note of Pensions Awareness Week and have a good think about how much they are currently saving towards retirement, assess any shortfall and ultimately take action to ensure they can live comfortably when they retire.”
Springall added that savers should look at the available options, such as an annuity, also suggesting that retirees planning to rely on their home to fund their retirement look into equity release.
CornerstoneTax revealed findings that 19 per cent of over-50s plan to use their property to fund retirement, warning however, that purchasing property with a pension can be “tricky and subject to special rules and taxes”.
Cornerstone Tax principle consultant and founder, David Hannah, stated: “Property investments with pension schemes has long been an effective way to maximise your pension value for when you do eventually retire.
“The complex rules around these transfers, however, can put people off or even result in overpayments of certain stamps taxes, resulting in reduced pension value.
“Getting this right is of paramount importance for individuals planning for their retirement.”
Furthermore, research by PensionBee has highlighted the potential benefits of downsizing, estimating that downsizing in the UK could unlock up to £417,8881 of savings ahead of retirement.
PensionBee CEO, Romi Savova, stated: “Given the stamp duty holiday there’s arguably been no better time to downsize, especially if you’re approaching retirement and looking to grow your income.
“Increasing evidence suggests that the majority of us aren’t saving enough for retirement, and where it might not be possible to make larger pension contributions, property can help bridge the gap.
“As our data indicates downsizing could release a significant sum, right across the UK, so it’s something that could be worth considering if you want to boost your retirement fund.”