Hadassah Shulman – 26 February 2020

The UK seems to be in the grips of engagement fever. According to an article in the Evening Standard, over 100,000 engagements take place over the Christmas period; and this figure comes before we even consider romantic occasions such as Valentine’s Day and a leap year. However, there is one form of engagement, which seems to slip the mind of many; engagement in pension schemes. So, with the more than 50 million people contributing to pension schemes across the UK, perhaps now would be a good time to reconsider your engagement proposal.

Now, traditional marriage proposals such as getting down on one knee are perhaps not the best method of enhancing pension scheme engagement. Indeed, ShareAction thought it might be more effective to kick-start the conversation and host an event called “Beyond automatic enrolment: New approaches to engaging savers.”  Using real-life examples of engagement proposals for the pensions industry, the event hoped to inspire new ideas to enhance scheme involvement. Perhaps not the most romantic of events, but it certainly was engaging.

The passionate panel and audience from across all aspects of the pensions industry had a lively and wide-ranging debate. If you were unable to attend, fear not! We have broken down the key points, which will hopefully inspire you to enhance your involvement with your pensions scheme.

Why get engaged?

Just as it differs from couple to couple, the answer will also vary from person to person. For some, the reason might be as simple as increasing a basic understanding of pensions. For others, it might be to improve saving behaviours by boosting their contributions, or to ensure your pensions scheme is being used ethically.

Motivation for increasing engagement can also stem from self-preservation. For example, some pension engagement plans were predominately aimed to educate members about the dangers of pension scammers. Especially in an age of increasingly sophisticated technology, it has never been more important to protect one’s property – particularly their pensions.

Regardless of the reason for boosting member engagement, the most important point is that a plan of action is put in place. That said, with various reasons for boosting engagement, it won’t be a case of one size – or indeed, one engagement plan – fits all.

Barriers to engagement

For a successful proposal, it is necessary to work out in advance what might put someone off so that you can actively counteract those things.

Some of the potential barriers to member engagement discussed included:

  • Present bias – we struggle to focus on things so far in the future

  • Pensions are abstract and intangible – it is difficult to engage with the invisible

  • Pensions jargon can be hard to understand

  • People do not feel that they can control their pension

  • There is no emotional attachment to pensions… except perhaps fear!

  • Interest in pension doesn’t translate into action – apparently, people need to hear something 28 times before they act on it!

  • A lack of trust in the financial services industry

Myth busting

The first step to breaking down the barriers to engagement is separating the fact from the fiction. After all, with a plethora of ‘fake news’ and ‘click bait’ about pensions readily available on the internet, it can be very easy for savers to feel disengaged from their pension scheme.

For example:

  • Whilst some older people may prefer to pick up the phone, one pension provider has found that there is similar amount of engagement with their app across the ages and the oldest user is 78 years old.

  • The generational divide appears to be less stark than it is often portrayed. Financial security is a common concern for all generations. Whilst some priorities may vary from generation to generation – younger generations are generally slightly more concerned about the environment than older generations, for example – everyone is concerned about financial security.

  • Whilst alcohol and tobacco companies are usually viewed as ‘villains’ of pension scheme investments, this is not always the case. Indeed, for some, pension scheme members have strong feelings against other organisations such as tech and social media companies. It’s important to remember that every scheme member is different and so will have very different priorities.

Proposal ideas

The most exciting and inspiring part of the event was the number of proposal ideas already out there. If better member engagement was your New Year’s resolution – to help you keep your resolution beyond February – here are our top 15 engagement proposals from the event:

1.    Talk to members to find out what their values are and reflect these back to them

2.    Send a video to members when they first join explaining the basics

3.    Use responsible investment to knock down the barriers to engagement, to generate a sense of urgency within scheme investment

4.    Use the language members use to make pensions more accessible; for example, using the phrase “retirement savings plan” in place of “defined contribution scheme” if no one uses this phrase

5.    Use incentives (financial and otherwise) to encourage contributions

6.    Show people how pension investment is building the world around us; for example, create a map showing what pension investment money is doing in their local area

7.    Help members to put their savings into perspective by showing pension savings next to people’s bank account in monthly or annual pension statements.

8.    Make pension information more easily accessible

9.    Only try to engage for small periods of time

10.  Provide the ability to transact

11.  Keep engagement broad, short and simple

12.  Stay clear of jargon to ensure all members understand the scheme

13.  Provide information in £s not percentages

14.  Think about future themes such as use of artificial intelligence, social media and sustainable cities

15.  Tinder for pensions (yes, really).

It is not going to be possible (or necessarily beneficial) for everyone to do all of these but perhaps, as 2020 progresses, the industry’s resolution should be to try at least one new proposal each to get members engaged.

Hadassah Shulman is part of the NextGen Research and Insights subcommittee.

Black woman's hand being held showing off engagement ring