As pension professionals, we see first-hand how difficult it is for the general public to navigate the complexities of retirement planning and financial security. In an era where the responsibility for retirement planning has shifted significantly from the employer to the employee, having a good understanding of pension arrangements and retirement income becomes all the more crucial.

For the past 10 years, Pension Awareness Week has sought to bring pensions to the forefront of people’s minds; the event serves as an essential reminder of the significance of pensions and the vital role they play in securing a stable future for people from all walks of life. Here at NextGen, we think Pension Awareness Week also provides an opportune moment to address another critical aspect of the pensions landscape – the need for greater diversity within the pensions industry and amongst pension professionals.

What is Pension Awareness Week?

Pension Awareness Week runs from 11-15 September this year. It aims to raise awareness and educate individuals about the importance of pension planning and provides a platform to share information, guidance, and support to people of all ages and backgrounds. Pension Awareness Week is a collaborative effort between corporate partners and government bodies to promote financial literacy and empower individuals to make informed decisions regarding their retirement planning.

The role of diversity in the pensions industry:

While Pension Awareness Week focuses on the general public, here at NextGen, we think it is equally important to address the representation and inclusivity within the pensions industry itself. That’s because we believe that diversity amongst pension professionals can have a significant impact on pension outcomes in several ways:

• Enhanced Communication: Different communities may have varying levels of trust and comfort with financial institutions and advisers. Diverse pension professionals can bridge this gap by effectively communicating with clients from diverse backgrounds, making them feel more at ease when they make important decisions around their financial situations and retirement aspirations. This could be as simple as understanding what kind of computer or software access members have to engage with their pensions.
• Developing new services and products: A diverse team of pension professionals is more likely to recognise the unique retirement needs of various demographic groups. This can lead to the development of more inclusive and innovative pension services that cater to a broader range of individuals. For instance, services that specifically address the retirement challenges faced by women, minorities, or the LGBTQ+ community may be more effective in ensuring their financial security in retirement.
• Representation and Trust: When members look to their pension trustees, they may struggle to see how they are being represented. It’s an age-old problem and can make recruitment for member-nominated trustees really difficult. The same issues plague pension professionals – and you can find more information on recruiting and retaining diverse talents in our previous reports. However, our hope is that the presence of trustees and professionals who reflect the diversity of society can build trust and confidence in the pension industry, encouraging more individuals to actively participate in pension plans and secure their financial future.
• Improved Decision Making: Research has consistently shown that diverse teams make better decisions, because hearing lots of different perspectives means that we are more creative problem-solvers and more adept at identifying errors in thinking. By encouraging diversity in the pensions profession, our hope is that the industry will benefit from a broader spectrum of viewpoints and expertise when formulating retirement strategies and scheme journey planning.

We are grateful that Pension Awareness Week stands as an annual reminder of the importance of pension planning and the need for financial literacy. This year we are flying the flag for diversity and inclusion, and believe that by fostering inclusivity and representation, the industry can better serve the diverse population it aims to support.

Photo by Alexander Grey on Unsplash