What Joe Wicks and the pensions industry have in common
What do Joe Wicks and the pensions industry have in common?
Not that much, actually. But the pensions industry could learn a lot from the fitness instructor.
It all comes back to setting and then maintaining good intentions, something Joe Wicks has managed to encourage many people to do, via his app.
The pensions industry is trying to do the same thing when it comes to encouraging people to get – and stay – engaged with their retirement savings.
Midlife MOTs are one way the industry is trying to make a difference to people’s retirement outcomes. But it would be all too easy for people to come out of a Midlife MOT intervention with good intentions, only for real life to get in the way of following through.
So, what can the industry learn from Joe Wicks and other successful apps which harness behavioural science to convert good intentions into tangible actions?
Marginal gains
Encourage savers to start small and build up, urges Cath Collins, a senior writer at communications consultancy Quietroom. “Saving into a pension is all about marginal gains and consistency in a similar way to Joe Wicks’ message, coupled with small interventions along the way.”
What about if pension schemes encouraged people to increase their savings rate by a certain percentage – and then gave them a small one-off bonus from their employer if they did it? Suggests Hannah Lewis, founder of Behave London, a consultancy which brings behavioural science to pensions.
Create a community
Joe Wicks shares motivational stories of people who’ve transformed their lives through using his app, points out Lewis.
Lewis says: “Leveraging social proof [a phenomenon where people follow and copy the actions of others] makes people more likely to engage with their pensions if they see others doing it too. Show testimonials and statistics of your peers benefitting from what they’ve saved.”
She remembers running a workshop where older workers shared lessons they’d learned about money and saving with their younger colleagues, bringing the subject to life and teaching people valuable lessons.
Use positive framing
“Joe talks about exercising because you love it, because it makes you feel good, not to get a six pack, which I really like about him,” says Collins. He also praises people when they hit their goals or exercise regularly for a few days.
What can the pensions industry learn? To give people positive feedback when they’re saving and emphasise what their savings will do for them.
Describe the experiences that a healthy pension could create – such as the holidays and experiences it could buy in retirement – rather than trying to draw people in with percentages and amounts of money they need.
Give people a reset
Lewis is a fan of the reset that Midlife MOTs can provide. Inspiring someone to take a pensions reset on a significant birthday is a good idea – but time it carefully, she says. “There is a natural life reassessment at certain points. Catching someone on a significant birthday – whether it is a half-decade milestone like 35, or 40 – is a good idea.”
Lewis caveats: “You just have to be aware that these big birthdays come with overwhelm. The impending milestone, like 39, is overwhelming. Checking in with someone a month after a big birthday is a good reassessment point.”
Harness the completion effect
Learning a language is a classic good intention which people don’t convert into action – one that the app Duolingo is helping people to overcome using a classic behavioural science technique.
“We have a lot of Duolingo obsessives in the Quietroom team who compare all of their streaks,” says Collins. “In pensions, what is the smallest thing someone can to do improve their pension? And then what’s the next thing? Why don’t schemes plot that out just to nudge people along?”
This is called the completion effect, says Lewis. “The more you do, the more you want to get to the end,” she explains. “With pensions, it is a case of showing people how far they’ve come.”
Encourage savers by congratulating them on how far they’ve come, and then nudge them towards the next rung on the ladder, Lewis suggests.
She adds: “When we take people through a Midlife MOT, we need to present people with a curated set of their most beneficial moves at this point. It needs to be tailored to them and be a limited set rather than overwhelming them.”
