The future of pension engagement

This article is part of a series called Rethinking Rewards. We’re inviting experts to question the assumptions behind some of the most common workplace perks.

Nominating “pension champions,” bite-sized messaging, considering neuro-diversity in communications, starting from day 1 and using hot topics like climate change are some of the best ways to get employees engaged with their pensions.

This is according to a range of experts that Octopus MoneyCoach spoke to about how we can make saving for retirement more exciting and relevant to workers. 

While auto-enrolment has done a great job in getting workers into pension schemes, there is still a lack of understanding and engagement. Some employees don’t even know they can log into their pension plan, and change their investments or increase their contributions.

The days of talking to workers about their pensions as one homogenised group, either by sending them fat brochures that rarely got looked at, or via long-winded webinars, are over.

“Things have moved on considerably – both in the way we reach scheme members, and the way in which we talk about pensions,” notes Daniel Smith, head of UK workplace investing at Fidelity International. “Participation in digital sessions is now significantly higher than face-to-face. Digital sessions provide more flexibility for members to engage in a way that suits them.”

He says conversations with employees are broadening, moving away from “pensions” and focusing on the role of retirement as part of financial wellness. Bite-sized action-orientated messages that are relevant to different life stages are also key.

“Providing members with a large goal – that is perhaps 30+ years away – is daunting and can be counter-intuitive,” reflects Smith.

According to Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, the most engaged workforces tend to be those that have “pension champions.” She explains: “They might be someone in HR, benefits or on the employee council. These people can be very effective at helping nudge people into finding out more. I think sceptical employees are more likely to trust their colleagues than they are someone representing a finance company.”

Diversity and inclusion will become an increasingly important focus for workplace pensions. For example, how they can address the gender pension gap, but also considering any vulnerable employees, perhaps due to health issues.

Smith points out that neuro-diversity should be factored into engagement materials, such as adding subtitles to video content.

For Shah Abbasi, head of coaching at Octopus MoneyCoach, talking about pensions as soon as an employee joins a company is crucial. “Pensions should be included in the induction – when you join an employer, ‘here’s your email address, here’s access to our IT system, here’s your pension log-in details, and here’s what you’re contributing, and would you like to look at the impact of increasing it?’”

The earlier employers can get their staff interested with their retirement savings, the more powerful it is, and the better outcomes they’re going to have, says Heidi Allan, head of financial wellbeing at the consultant Lane Clark & Peacock. 

She adds that HR teams can use “hot topics” to boost engagement, such as climate and the environment. “These are beliefs and values that everyone cares about and we think about in our daily choices, such as recycling, what to eat, which car to drive.” Most workplace pensions offer a sustainable or ethical fund choice. 

Finally, the importance of keeping communications simple, and testing as you go, should not be forgotten. It may take several attempts to get staff engaged, so employers should persevere. Simpler log-ins, forecasting calculators and giving employees the opportunity to book 1-on-1 time with an expert can all help.

The importance of re-framing pension conversations

We asked Amanda Hall, head of customer engagement and financial wellbeing at Smart Pension how to get people feeling more inspired to think about their pension and take action sooner in their careers.

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