‘Why aren’t we on TikTok?’

But, with an engagement problem facing pensions, this thinking – even if not always this platform of communication – must be adopted because engagement with pensions is having a serious impact on how effective pensions are.

Hundreds of thousands of hours are spent every year trying to communicate and connect with members, covering everything from their entitlement to benefits, to investment activities, to the names of the scheme’s lawyers and auditors. 

Given the ever-increasing list of information that schemes need to communicate, bringing members with us on that journey is undoubtedly a challenge

But are any of these attempts to connect cutting through, and what impact is a business-as-usual approach to pension communications having on members’ engagement and financial literacy in the meantime?

Talking at members, not to them…

There is a trap of assuming that we are connecting with members just because we have issued something to the membership, or that the “include it in the member newsletter” style of communication is adequately meeting member requirements. 

A Department for Work and Pensions study published in January 2023 revealed that “participants felt that they had low understanding both of their own pension and how pensions worked”. This study also indicated that written emails (“too easily passed over”) and quarterly newsletters (“quite long and overwhelming”) were doing little to address this problem. 

For some individuals, their low engagement with standard communications might also be explained by a 2022 study by Kings College London regarding adult attention spans. This found that 41 per cent of UK adults say the pace of life is too much for them, and 60 per cent of adults wished their life was more simpler.

Why is this important now? 

These statistics point to an uphill struggle for pension schemes if they want to win the battle for their members’ eyeballs and engagement.  

However, low rates of interaction with pensions is not a new phenomenon. So why should pension schemes be downloading the latest social media apps and expanding their horizons in terms of their communications strategy? The answer lies in the pace of future change.

Tech and media-savvy millennials are already firmly entrenched in the workforce. Their succedent generations, Generation Z and Generation Alpha, are taking their first steps into the world of money management and financial independence.

These generations have a firm connection to social media and modern marketing techniques. In general, they are less likely to read articles on managing a budget and choosing investments than to watch 30-second clips setting out “hacks” for maximising their finances. 

Speak the language of digital natives

If a recent UK government bill is passed to reduce the relevant age limit for automatic enrolment from 22 to 18, then understanding and targeting this group will be an essential requirement of pension communications.

Coupled with a brand new generation of media-savvy members, pension schemes are also looking ahead to several legislative changes designed to increase member engagement with their pension pots.

This includes the upcoming pensions dashboards, which will put individuals’ pension information in one place, and at their fingertips. That, along with the relevance of pensions to areas such as climate change, gives the industry the rare opportunity to ignite the interest of savers who may have previously ignored their pensions information.

All these changes are a seminal moment for pension schemes, and an opportunity to engage with new members in new ways. The next question is how.

What can we do about this? 

The industry has already made large strides in simplifying the language and length of communications. While there is undoubtedly more that can be done in the area of what, the next important focus is how and where we are communicating it. 

On the “how”, while the target audience will differ by scheme and communication – a closed defined benefit scheme will have a different membership audience than a defined contribution master trust – all schemes are likely to improve member engagement if they do more to factor in neurodiversity, particularly by bearing in mind that some people respond to images and videos better than text.

For example, for member-nominated trustee/director elections, why not consider including videos of the existing trustees to engage members and give them a chance to see and hear what it is like to be a trustee? 

On the “where”, it feels like there is more to be done in understanding where and how members consume information. Some may not use computers in their day-to-day jobs, so how does the scheme sponsor communicate with members, where do members go to get information (TikTok, YouTube, other social media)?

No need for gimmicks 

We are not suggesting that schemes add a “dancing dog for TikTok” to their next annual budget. But it does feel like more could be done to align what we are doing with the way that members consume information in their daily lives. 

Given the ever-increasing list of information that schemes need to communicate, bringing members with us on that journey is undoubtedly a challenge. But a renewed focus on how and where we are communicating will reduce the risk that there is an illusion that communication has taken place, but no engagement. 

The pensions sector is becoming increasingly bold in its communications. But we can do more, and part of that endeavour has to be asking ourselves questions like: “Why aren’t we on TikTok?” 

Charlotte Cartwright is a partner and Alex Lane is a senior associate at Eversheds Sutherland