Should member communications be tailored to gender?

Members need to know that to retire in comfort, they should join their scheme as soon as possible, save as much as they can afford for as long as they can and regularly review their contributions.

Except for the lowest earners, the state pension alone is unlikely to be enough to maintain their standard of living, and for more and more employees the actions needed are all down to them.

Women as a group still live longer and are therefore at greater risk of running out of funds in later life

Employers may feel the statutory communications under auto-enrolment are enough. But because joining the scheme is no longer a choice, some employees may be less likely to value it, and more worryingly they may feel joining means they’ve done enough and could end up massively undersaved at retirement.

Before we worry about gender issues, we have to be sure every member understands some basic truths.

What is different for women

There are a couple of extra home truths for women:

1. The state pension is the only one that does not depend on how much you earn. Women do tend to get lower pensions because they tend to be in lower paid jobs, particularly if they take career breaks.

Relying on their husband’s pension assumes he is still around and still married to them. Women should be encouraged where possible to have their own pension provision in case of unforeseen events.

2. Women as a group still live longer (but men are catching up). Although annuity plans can no longer take this into account, other forms of savings do. Women are therefore at greater risk of running out of funds in later life. 

Trustees could consider including gender specific communications on these issues on top of the standard information they send out, rather than tailoring their whole communication strategy.

Tailored communications

There is in fact a strong case for tailored member communications, but the tailoring would be more effectively aimed at different age groups, regardless of gender.

For younger employees just joining the scheme, basic information is probably all they need. However, once employees reach their 30s and 40s it is important for them to consider setting income targets and creating a plan to achieve them.

A table showing the 'cost of delay' will also help them understand the benefits of acting earlier.

Left to themselves, most members are likely to underestimate the cost of retirement, partly because they don’t realise how long they might live in retirement, and partly because they don’t factor in the effect of inflation.

We have seen a lot written about employees in their mid to late 50s who are now able to take their pension fund as a lump sum and spend it all if they wish.

While communication is vital at this point, it really needs to start much earlier. A reasonable point to start educating members on their retirement options might be the annual renewal after they reach age 50. For most, this would still give them time to make a difference to the size of the pension fund and the way in which it is invested.

Methodology

All of these issues can be communicated in generic leaflets and/or online, all you have to do is make sure they are attractive enough to be read. (even if they do contain the 'P-word').

Some employers also hold workshops for employees who are about to retire; perhaps this could be expanded for younger age groups.

Fundamentally, I don’t believe member communications have to be gender-specific, however I will freely admit that a nice picture of Daniel Craig is more likely to make me look twice at any information I am given.

Fiona Tait is pension specialist at mutual insurer Royal London