The Pensions Regulator and UK's financial watchdog have teamed up to ask the industry for help on reshaping pensions to improve them for savers.
The Financial Conduct Authority and TPR want to shake up legislation to help savers get "greater value for money" and improve people's understanding of their pensions.
At the moment, the organisations said, millions of savers struggle to make the most of their savings, stick with badly-performing investments, and are vulnerable to pension scams.
To help resolve these issues, the FAC and TPR have given trustees, pension providers, experts and employers a chance to share their views on the best ways to tackle the situation.
Stakeholders will have until 30th July to share their input.
It is important our regulation keeps up with what is happening in reality. We want to hear about what is working well and where the consumer journey can be improved.
In a 19-page document published by the watchdogs, it was revealed that nearly 40% of workplace pension holders say they don't know how much they or their employer pay into their pension, while 31% say they don't know who their pension provider is.
Meanwhile, nearly half (45%) of pensioned workers confessed to not thinking about how much was in their pension until just two years away from retirement- by which time their pot may have languished for years in a badly-performing investment.
Senior Analyst at AJ Bell, Tom Selby, said the regulators' move was long overdue:
Pensions have been crying out for a more joined-up approach between the two main regulators for years.
This call for input feels like a genuine step in the right direction on that front, assessing the pension saving journey from cradle-to-grave. This approach should help ensure interventions are applied in the same way across different types of pensions.
As well as the regulators' plans to review current rules, the government is also looking to simplify the way people get information about their workplace pensions.
It hopes by standardising how investment performance is reported on annual statements; consumers will understand what is happening to their savings more quickly.
We know from various pieces of behavioural research that, when it comes to improving understanding of concepts like retirement saving, for most people, less is usually more.
The rules governing pensions communications have been built up over the years and often lead to far too much paperwork being sent out to savers which, frankly, most people simple chuck straight in the bin, said Bell.
At the same time, new 'pension dashboards' will allow workers to see all of their pensions savings in one place, recognising that by changing jobs, many people will accumulate several different pension pots throughout their working life.
The number of self-employed people or work in the 'gig economy' has also increased since the current pension system was introduced in 2012.
Earlier this week, the head of The Pensions Regulator Charles Counsell said
the watchdog had been working closely with Uber following a Supreme Court ruling that ruled that the company's drivers are employees, not self-employed, and called on other similar companies to start providing their workers with pensions.
I am going to call on other organisations in the gig economy to start to recognise that the people who work for them are workers and should be eligible for a pension," he said while speaking on the regulator's 'TPR Talks' podcast.
Besides employment type, the report identified a range of structural issues which could affect savers' engagement in pensions savings.
These included gender, ethnicity and disability, which may all affect the likelihood of savers' maximising their pension savings.
The regulators said that more could be done to help different groups of workers proactively engage with their pensions by addressing these structural issues.
How does Money Savings Advice work
Money Savings Advice is an independent editorial company providing detailed information about numerous financial niches with the aim of helping consumers make informed financial decisions. We aim to provide hints, tips and techniques to help you make your money work for you. However, we are not perfect, and we accept no liability if anything we write about goes wrong.
Money Savings Advice is a trading name of RMM Digital Publishing Ltd. Registered trading address, First Floor, 85 Great Portland Street, London, W1W 7LT. Trading in England and Wales, company number 11550143 with data protection number ZA747669.
Money Savings Advice is a trading style of Consumer Credit Justice Ltd.
Consumer Credit Justice Limited is authorised and regulated by the Financial Conduct Authority, Reference 834486. We are regulated by the FCA in respect to claims management activities.
You do not need to use the services of Consumer Credit Justice, or any other claims management company, to make a claim. You are free to choose an independent solicitor of your choice.