From the blog: Communications can help people get to grips with their long-term savings objectives, but if we do it the wrong way our attempts to help could fail – no matter how important the message.
Pension managers and trustees are beginning to understand the importance of education and engagement to members. Our recent research shows communications are now more than just a regulatory box-ticking exercise.
It is clear there is a knowledge gap when it comes to pensions; a well-tailored communications strategy could be the bridge
Close to two thirds (64 per cent) of pension managers and trustees saw communications as a way to better explain retirement options to members. This is understandable when 56 per cent of our respondents felt their membership didn’t understand their pension.
If people do not understand their pension they are likely to value it less. Many schemes are aware of the role communications can play here, and 55 per cent of respondents also saw communications as a way of improving the perception of benefits.
But collectively, over the years, the industry has made pensions complicated. Research, which involved speaking to 3,000 employees, found 50 per cent said pensions terminology is a barrier to them doing more to plan effectively for retirement.
Furthermore, 52 per cent simply do not know how much they should be saving for retirement.
Pensions are not necessarily an unpopular benefit, as some suggest, just intangible in terms of the language we use and how they are accessed.
Our research found 47 per cent of employees believe everybody should join a pension regardless of how much they earn.
Are people unengaged?
There has been the perception that people, on the whole, are disengaged and disinterested in their pensions, but is this really the case? A quick review of Google Trends (which shows the relative popularity of search terms) indicates there has been a higher search volume for pensions than for Kanye West in the UK.
Although Google Trends merely provides a high-level overview of search data, it is still encouraging for the pensions industry.
It is clear there is a knowledge gap when it comes to pensions; a well-tailored communications strategy could be the bridge.
It may be convenient to hide behind lines such as 'people don’t like pensions', but this is seemingly an assumption rather than fact.
If schemes communicate unilaterally using outdated channels and messages, it is no wonder members are disengaged.
Increasingly, our work lives are being commercialised in all facets, and we’re expecting to see this from employers. The communications we get from B2C and B2B companies have set a higher benchmark and is something we have come to expect. It is an adapt-or-die scenario.
Think how many channels we check on a daily basis. People supposedly have two emails accounts on average, social media accounts, texts, Whatsapp, intranet and so on. There seems to be an ever growing list.
To send one communication to one email address at one time of day would be naïve.
We’ve moved away from a one-size-fits-all approach to an audience of one. There is plenty of technology available at a relatively insignificant cost that can be used to provide more effective communication strategies.
With more and more people joining DC pensions, coupled with the new freedom and choice reforms, it is crucial that people understand their pensions and the options they have at retirement. There is far more scope for error, not just in terms of at retirement options but also the danger of scamming. Members need to be equipped with at least a base level to be able to ask intuitive questions.
This is one of those rare chances in life where we can have a real win-win scenario. Members better understand their pension and retirement options; employers and schemes can improve engagement and know that their people are better equipped for the future.
Gareth Davies is research and engagement manager at Capita Employee Benefits
