Legal & General Retail Retirement has expanded its retirement range by launching two services to help customers with their pensions.
The first is a ‘stand-alone’ tracing service to aid people track down lost or forgotten pensions, and the second is a consolidation solution, for those wanting to bring their various pots together with Legal & General.
Tracing service
With 1.6 million pension pots unclaimed, worth £19.4bn ($26.4bn, €21.5bn), Legal & General aims to address a growing customer need.
The tracing-only service will offer a ‘no-strings’ option, meaning customers have no obligation to buy a product once tracing is complete.
It needs only basic details to draw on a database of UK pension providers and administrators to locate pensions and present them in a single dashboard view. The tracing-only service has a one-off fee of £100.
Customers will then have the option of deciding their next step – to get guidance or speak to a financial adviser; do nothing, other than have an up-to-date record of their pension savings; or to consolidate their pensions into one Legal & General retirement product, in which case their fee is refunded if they take this action within six months.
Tracing is free for those selecting to consolidate their pensions with Legal & General from the outset.
‘Retiring cliches’
Emma Byron, managing director of Legal & General Retirement Income, said: “In times of financial uncertainty, every penny of your pension counts. But still, too many people lose track of past pension pots.
The average value of lost pots has been estimated at nearly £13,000 and the government predict there will be as many as 50 million dormant and lost pensions by 2050. People change jobs and move house more frequently than in the past, but the options for people looking to trace their pension pots have not kept pace.
“At Legal & General, we are retiring the clichés and reducing the complexities of retirement. Our service aims to make life simpler for the millions of people who need help locating lost and forgotten pots, without them having to have their old pension statements to hand.”
Bringing pensions under one roof
Legal & General’s research shows over half (53%) of 45 to 65-year olds have more than one pension pot and, of those, only 17% have already consolidated to better manage their savings.
Through the service, once customers have located their pension pots, they can choose to consolidate into a range of retirement products depending on age and needs.
Under 55s will have the option to consolidate eligible pension pots into a Legal & General pension, while customers of retirement age can choose from a guaranteed income for life, or for a fixed term, drawdown, or a combination.
They may also continue saving in one personal pension.
‘Control over their own retirement planning’
Byron added: “We also recognise that not everyone is ready to make that consolidation decision until they have a better understanding of all their pension savings, which is why we’ve created a ‘stand-alone’ tracing option for customers unsure of their next steps.
“People now have control over their own retirement planning, which is great, but for the many non-advised consumers that means they need simple, low-cost and transparent products.
“There are a number of reasons why it can make sense to bring your pension pots together. If you are still saving, it gives you a clear view of the charges you are paying and means you can choose to bring a higher charging pension into one with lower charges.
“If you’re 55 and over, looking to consolidate to get a retirement income, consolidating means you can receive one payment. Making it easier to keep track of your finances.”
