Whether you’re a pensions professional, financial adviser or consultant, you’ll be aware of the importance of getting investors to engage meaningfully with their pension.
Since 2012, auto enrolment has been helping millions of people save for their future for first time, but with many remaining at default contribution levels, it’s time to address the barriers that are preventing 'Generation Default' from taking control.
Working with Nest Insight, we’ve undertaken rigorous research to uncover the language that will help change how scheme members think about their pension. We spoke to 8 industry experts, 33 everyday members and surveyed another 1,500 to unearth what's stopping people becoming more active at key points in their retirement saving journey, and how we can remove these barriers. The findings are now available in our report Beyond the Defaults.
In this report, our findings are summarised using a framework we call the ‘Four Ps’ – recommendations that communication with savers should be Positive, Plausible, Plain spoken and Personal:
Too often, messages focus on how savers are missing out, not what they can get if they act. ‘You can’ is more likely to engage than ‘you should’.
People are pragmatic. A credible presentation of the benefits of saving is more likely to connect than visions of a dream retirement.
Employees want to hear what they will get out, not what they put in. Outcomes need to be shown in pounds and pence, not percentages. Use an estimated income figure, rather than pot size to enable people to think about what lifestyle they will be able to afford relative to their current annual income.
‘You’ is more engaging than ‘us’. People are more likely to want to make their own choices if they know they are on a ‘default setting’
This report explores a challenge at the heart of pensions auto-enrolment. The approach has been successful because it harnesses people’s inertia. Yet this same inertia is the thing that’s standing in the way of people engaging with their levels of saving.
Established by the UK government as part of its auto enrolment initiative, Nest is one of the world’s fastest growing pension schemes with 8 million members and counting. Nest Insight is a collaborative research unit set up by Nest Corporation to help understand and address the challenges facing Nest members and other defined contribution savers. Working in partnership with industry, academics and policy makers around the globe, their mission is to understand and address the challenges facing defined contribution savers.
