Most people are unclear of how much they are paying into a pension and how much their pension pots are worth, highlighting the need to provide communications that not only informs but also inspires them to engage with their pensions. Pension communications should be seen less as a tick box exercise and more as a gateway into long-term savings and retirement planning.
A survey from the Chartered Institute for Securities & Investment (CISI) found that of those employees who are contributing to a pension, 56% did not know how much money they are paying into their pension each month. Furthermore, 76% of respondents were unsure of the size of their pension pot, with women more likely than men to be in the dark about the size of their fund.
That people don’t have a clear idea of what their pension pot is worth perhaps isn’t a surprise given that many people won’t stay up-to-date with their pension information: according to CISI’s research, 34% of respondents never check the status of their pension account while 31% check their pension less often than every six months. CISI’s research found that just a quarter of respondents over 55 – and who are edging closer to retirement – stated that they never check their pension.
Our survey found that while employees mostly understand the pension communications they receive it rarely results in increased contributions, while only 19.4% say that it led them to take more active interest.
However, as research from the Behavioural Insights Team illustrates, good pension communications can really drive up engagement. A trial showed the effect of adding a short few page document, a Pension Passport, that consolidated information from the typically 50-100 page pension wakeup pack sent to those nearing retirement. The Pension Passport substantially increased engagement with the visits to the government’s Pension Wise website increasing over tenfold.
Another relevant example is auto-enrolment which has been very successful in increasing the number of employees enrolled in workplace pensions, requiring no active decision making from an individual as they were automatically signed up. However, it still has a way to go in driving up savings rates, where people save more than the minimum required. There we can’t simply rely on inertia and soft compulsion as people need to really want to save more in order to do it.
Making sure that pension communications are targeted and relevant can help to increase interest in pension saving and drive up that desire to save. Given that 51.0% of employees we surveyed said that they would be willing to save into a pension if they had a better understanding of how a pension scheme works, there’s clearly scope for pensions communications to better engage employees.
Throughout the month our research team keep a close eye on what is happening in the pensions and employee benefits industries. Here is a roundup of the best news articles and stories for February 2018.
Over half of lesbian, gay, bisexual and transgender (LGBT) people retire earlier than planned – putting them at risk of poverty in their senior years. Aegon’s survey finds that the most common reason for this is ill-health.
10% of all UK 18-24 year olds who work do not know what a pension is and how it works, with women understanding less than men, according to the latest research from the Chartered Institute for Securities & Investment (CISI).
The Department for Business, Energy and Industrial Strategy has announced that millions of workers will get new day-one rights with sick and holiday pay to be enforced for vulnerable workers for the first time.
The majority of employers provide paid bereavement leave for employees who lose a loved one, family member or dependent, despite there being no current statutory obligation to do so, new research finds.
In the early 1990s, average hourly wages were almost 30% lower for female employees than for male employees. The gender wage gap has come down, but it remains at around 20%.
New research from Bupa shows more than half of UK adults (53%) believe that people are more aware of mental health conditions than they were five years ago, however many (49%) are using words such as ‘schizophrenic’ and ‘autistic’ to describe themselves incorrectly.
Alex Tullett, Head of Benefits Strategy shares his views with Employee Benefits magazine on the impact of data on a business’s overall objectives.
Two-thirds of British adults would put off seeing a GP in case they were told they had a serious illness, research suggests.
Charities call for ‘Breathing Space’ scheme to be extended to the 23,000 people battling debts while hospitalised due to their mental health last year.
Results will assess progress made by employers on recommendations in the independent McGregor-Smith Review.
The problem arises where people have told a pension scheme that they want any payments after their death to go to a first spouse but they subsequently divorce, remarry or form a new partnership.
Survey participants were asked about their financial wellbeing priorities for the year ahead. Reducing stress-related absence due to financial worries’ received a high rating, with 60% of respondents making this either their first or second choice.
The Department for Work and Pensions has pressed ahead with regulations easing the bulk transfer of defined contribution members without their consent, seen as a milestone in a drive for scheme consolidation.