22 February 2021
Before Coronavirus struck, pensions weren’t exactly dinner party conversation.
Let’s be honest, if you were the guy that started to talk about pensions – and I often was – you got a polite nod, an amicable gaze, and a lesson in more or less subtle ways to get out of a conversation.
After three lockdowns and a summer of Eat Out to Help Out, most people have forgotten what a dinner party is. But they’ve not forgotten how important it is to plan for later life, even if they don’t want to get bogged down in it over cocktails and canapés.
In our 2020 financial wellbeing survey, which sought the views of more than 10,000 UK employees, pensions were the most valued employee benefit across all age groups.
This remains the case in our 2021 survey, where 75% of people identified pensions as the most important company benefit.
After a year of virus-induced instability, it’s interesting to see that people still value employer-based pension products more than short-term savings vehicles or private medical insurance.
Of course, there is some variation across the age spectrum. We all know that the nearer you get to retirement the more present your pension becomes in your mind, and our survey results bear this out. Younger people have different priorities and that means other benefits top the list, like flexible working and their personal development. Nonetheless, pension provision rises to the top quickly once people get into their 30s and start to focus on the long-term.
Given that employees recognise the importance of a pension, it’s important to help them make the most of the opportunity presented by the company scheme. Engaging employees about their pensions is not always easy, but our latest survey provides some real insight into the sorts of communications that help:
- Face-to-face is best: If we’ve learnt anything from the pandemic, it’s that there’s no substitute for human interaction. This is as true when it comes to pensions as it is with anything else. It was the top method of communication identified by employees looking for help with or more information about retirement saving, and it’s especially valuable when it includes personal advice.
- E-mail is a must: Sometimes people just don’t have time to go to that workplace pension seminar or advice session; at other times they need to see pension information in front of them to process it, especially if they’re contemplating making changes to their plan. This is where e-mails can help, especially if they provide links to tools and other pension planning resources.
- Online resources are essential: We spend so much of our time online now that it’s not surprising trusted internet sites are an important source of information about retirement saving for employees. Whether it’s Martin Lewis’s Money Saving Expert, the PLSA’s Retirement Living Standards, or government resources (like Pension Wise and The Pensions Advisory Service), signposting employees to trusted sources of online information can add value to their retirement savings journey.
Where employees seek out information, it’s important to find the right package of communications for them. The real concern for me is those employees who don’t seek out information on pension benefits and retirement saving. A third of those who took part in our 2021 financial wellbeing survey fall into this category.
Getting to the bottom of why this is the case is crucial. Pensions are complex and this can make them daunting, even off-putting. One way of helping those who don’t actively seek out information is to deliver information to them when they’re most likely to take account of it.
Recent research has highlighted the importance of ‘teachable moments’ in people’s careers, which can improve the uptake of information. These moments vary between people by age and circumstances, but generally occur during key life transitions (e.g. getting a new job, enrolling in a pension scheme, getting a promotion).
Tailoring communications to employees’ circumstances in this way can engage those who would otherwise remain disengaged. LCP has tools that can help employers deliver targeted communications of this sort at the right time and in the right way. The benefit of doing so might just be a better retirement your employees.