Lloyds Bank launches ‘first of its kind’ ready made pension service making it ‘simple’ to save for retirement
The new product will be available initially to customers who bank with Lloyds Bank, Halifax or Bank of Scotland
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Lloyds Banking Group has launched a ready-made pension product, which is the first of its kind.
Customers will now be able to combine their existing pension pots or open a ready-made pension with the bank.
Lloyds Bank has teamed up with Scottish Widows to launch the digital app Ready-Made Pension, which aims to make saving for retirement simpler.
The service will allow pension savers to consolidate up to 10 existing pension pots, or create a new pension pot with Scottish Widows which is tailored to their age and retirement plans.
Around 21.5 million savers will be able to choose a simple pension product that is tailored to their needs through their existing banking app or internet banking.
The account will be managed by experts and will enable customers to track contributions and make changes at any point.
Customers can open a Ready-Made Pension with a minimum cash investment of £5,000
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The new product will be available initially to customers who bank with Lloyds Bank, Halifax or Bank of Scotland.
The launch follows the new research that revealed 50 per cent of UK adults would more frequently engage with their pension if it was accessible throughout their banking app.
The research by Lloyds Bank found just two fifths (42 per cent) of the UK population know how to contribute more into their pension.
The same study also found that of those who have multiple pots, a quarter would not know where to start to combine multiple pension pots accrued throughout their working life.
They aim to help making planning for retirement with their Ready-Made Pension app "simple and easy".
Customers can open a Ready-Made Pension with a minimum cash investment of £5,000 or they can set up monthly contributions from as little as £150 a month.
Savers can also transfer in existing pensions from £10,000 upwards.
Jo Harris, director at Lloyds Bank, commented on the launch saying: “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 Ready-Made Pension default offering will have an annual account fee of 0.3 per cent (or a minimum of £5 a month).
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There will be ongoing investment charges of up to 0.24 per cent, and a transaction cost of 0.14 per cent.
Between April 2018 and March 2020, only 20 per cent of self-employed people paid into a pension compared to 80 per cent of employees, figures from Lloyds suggest.
Jackie Leiper, managing director of pensions at Lloyds Bank said: “There is a real opportunity for Ready-Made Pensions to help self-employed people - for many of this group their business is their pension.
“Those who are self-employed have been overlooked in the discussion of saving for retirement.
“Traditionally, up until now. self employed people have had to take financial advice to get started with investing in their pension.”