Lloyds Bank has launched a new digital pension product to help make saving for retirement “simpler”.
Ready-Made Pension allows customers to consolidate up to 10 pension pots using the app or internet banking.
A tailored pension is then created based on their age and retirement goals, managed by experts. The service also enables individuals to track contributions and make changes at any point.
The product is currently accessible to people who bank with Lloyds Bank, Halifax, or Bank of Scotland, featuring an annual account fee of 0.3 percent (with a minimum of £5 per month), ongoing investment charges up to 0.24 percent, and a transaction cost of 0.14 percent.
Customers can launch a Ready-Made Pension with a minimum cash investment of £5,000 or set up monthly contributions starting from £150.
Additionally, they have the option to transfer existing pensions, with a minimum transfer amount of £10,000.
The product has been designed to support the industry-wide drive to improve pension engagement levels.
Up to 47 percent of those surveyed said they would like to be able to engage with their pension through their banking app.
The Department for Work and Pensions (DWP) has said that better engagement leads to better outcomes, yet engagement is currently low.
The Financial Conduct Authority (FCA) Financial Lives Survey reported that 47 percent have not reviewed how much their pension pot is worth in the last 12 months.
Jo Harris, director at Lloyds Bank, commented: “Pension saving can seem complicated and inaccessible for lots of people, but it is something we should all be doing as soon as we start working.
“We wanted to create a pension product that was genuinely easy to use, simple to access and removed all the jargon which can often be so off-putting.
“Most people focus on managing their day-to-day finances like paying the bills and putting money away for a rainy day, so pension planning can sometimes be pushed down the to-do list.
“When we were developing our Ready-Made Pension product, we wanted it to appeal to those who are time-poor and might not know a huge amount about how pensions work.”
The product comes as new research from Lloyds Bank found just two-fifths (42 percent) of the UK population know how to contribute more to their pension.
The same study also revealed that a quarter of individuals with multiple pots wouldn’t know where to begin in consolidating their pension pots accumulated over their working years.
The self-employed is a large group that can be overlooked in the discussion of saving for retirement. According to data from the Office of National Statistics (ONS), only 20 percent of self-employed people were paying into a pension compared with 80 percent of employees Between April 2018 and March 2020.
Lloyds Bank aimed to create a simple and accessible product to “take barriers away” for these savers.
It said: “Those with fluctuating incomes can take advantage of investing differing lump sum amounts or set up a direct debit payment.”
