How employers can bridge the pension confidence gap

The communications agency, part of Independent Governance Group (IGG), found a gap between members’ understanding of pensions and their confidence in making retirement plans.

Its survey of 2,008 UK workplace pension scheme members found 72% said they understood their pension, but only 53% felt confident planning for retirement. Meanwhile, 61% wanted to learn more.

The research also found that existing communications had limited reach. Almost half of respondents, 44%, could not recall receiving a pension communication during the previous 12 months. Of those who could, only 21% took the action it prompted.

“Members are asking for communications that feel relevant to their lives, answer the questions they have at different stages and help them understand what they should do next.”

Jeremy Petty, Like Minds

Members said they wanted information that reflected their own circumstances. Although 71% believed communications should be designed around their lives, needs and circumstances, only half thought the material they received met the needs of people like them. Just 40% felt it was tailored to their situation.

With 42% of members saying they would turn to their employer to learn more about pensions or retirement, Like Minds said employers were well placed to help schemes improve engagement. This could include targeting communications around different life stages and addressing the questions members are likely to have.

Jeremy Petty, director at Like Minds, said: “Members are not asking for more communications for the sake of it. They are asking for communications that feel relevant to their lives, answer the questions they have at different stages and help them understand what they should do next.

“Good pension communications should do more than explain pensions. They should help people understand what their pension means for their future and turn understanding into confidence and action.”