Pension Frustration
What’s stopping us from engaging with our pensions?
By Teamspirit on Thursday, 27 October 2022
It's clear from vast amounts of research that pensions remain a tough nut to crack. Which is surprising when you think about it. Millions of people pump their hard-earned cash into investments that can be used for their future… but letters continue to be shoved to the bottom of drawers and online account details quickly forgotten.
But why are people so unengaged with something that (at least to us) is so exciting and rewarding?
The answer may lie in how easy it is to find the information needed. For example, 51% of people think it can be challenging to access pension information.(1) And if it’s hard to find the numbers, it's even harder to take any sort of next step.
However, access isn’t the only hurdle we must navigate – knowing what to do with the numbers is also a struggle. In fact, only a minority of 35-45-year-olds said they either 'strongly agree' or 'tend to agree' with the statement 'I feel I understand enough about my pensions to make decisions about saving for retirement.'(2)
So even now, in 2022, people are still calling for clarity, convenience and confidence.
All of this raises, however, an interesting question: who is actually responsible for all this? The provider, the saver, or some larger power/regulator?
Some may argue it's entirely on savers themselves to shape up and take charge of their futures. But that’s easier said than done, clearly.
70% of people believe pensions can be overly complex and complicated to understand.(1) So could it be that while interfaces are being made simpler, it’s not how you use them but what’s in them that could be causing such low engagement rates? After all, if you’re asked to choose an outfit for a formal event, you may be able to browse a catalogue with ease but if you don’t know the etiquette involved then it’s going to be a scary decision without guidance. And that’s a simple choice in comparison.
It doesn't stop there either, as there are deeper concerns still. Research has found that 16% of people aged 40-70 haven't even started saving for retirement.(3) So why would they need an easy-to-use app if they’ve nothing to check? This could suggest starting even further up the chain could be beneficial too.
Of course, it’s understandable there’s no quick fix to the pension engagement conundrum, and there are initiatives and companies giving it their all to try to make everything easier, more accessible, and sometimes even fun. But, as with anything in life, there are more complex moving parts to pensions than first meet the eye, and trying to create a multi-pronged approach that tackles all of the above and more is no cakewalk.
If we create well-rounded strategies backed up by expert insights, and use these to create exciting engagement experiences, there's a chance we could turn all of this around. But it requires an incredible amount of knowledge and experience, which we'll explore in our second article on pensions disruption: 'Communication – rethinking the approach to pensions'.
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