By better understanding different people’s needs and attitudes, we can build a more inclusive retirement savings system. But do we understand other people as well as we might think?
The UK workforce is increasingly diverse and is set to change further in future. Pension systems and services naturally need to be designed to reflect these demographic changes. To do this, however, we first need to understand member needs and attitudes. I suspect this is harder than some of us might imagine.
Take, for example, some of the findings from Standard Life’s Retirement Voice 2023 survey, which explores the views of more than 6,000 people in the UK from all walks of life 1.
In this survey, half (51 per cent) of Gen Zers said they’d “rather invest in property than a pension”. Millennials weren’t so different, with two-fifths expressing the same attitude. What should we make of this?
Open to interpretation
Perhaps these findings tell us that younger people plan or expect to have second or
third homes in retirement, and hope the rental income from these will provide better income than a pension?
Might they also indicate that many young people have little faith in pensions to provide them with financial security in later life?
Or do they indicate, instead, that many young people feel that getting on the property ladder is immensely difficult, but more immediately important to them than saving for retirement – and therefore, this is what they’re prioritising?
Or might it be, rather, that we don’t really know?
Without asking the respondents what they meant by their answers, and better understanding people in this age group, we lack the context surrounding these findings. And data without context is like a riddle waiting to be solved.
What’s the context?
Other findings from the research perhaps also require further reflection. For example, around a third (32 per cent) of people from a Black, Asian and minority ethnic background said they were not focusing on saving for retirement because they were “expecting to inherit money or property”.
It would be easy to formulate a view about this finding, but, again, do we really know what it signifies? As we know, the significance of data becomes apparent when placed within its proper context. But what, exactly, is that proper context? And who decides?
Understanding the real context of many people’s decision-making would seem to require a level of knowledge, empathy – and dare I say, imagination – that is, individually, beyond many of us (me included!).
As we know, data interpretation is not purely objective. Emotions, beliefs and personal experiences can easily colour analysis. So if we’re not careful, data analysis can mislead as much as it can instruct.
This is where diversity can really help. A team that includes individuals with varied backgrounds and perspectives can help to enrich the group’s depth and range of sensibilities, and strengthen the overall interpretive process.
It also helps to stay humble. Embracing uncertainty and acknowledging the limitations of incomplete data – and of our own understanding – is essential to avoid drawing erroneous conclusions.
We are therefore proud to have a diverse Standard Life Master Trust Board, which helps to improve decision-making – and stay alert to things we need to learn more about.
As the amount of data used in our working lives increases in the years ahead, having diverse decision-makers is likely to become even more important. This is why Standard Life has launched the Trustee Accelerator Programme (TAP) to support the next generation of trustees.
All walks of life
TAP will provide participants with knowledge and insight into the world of pensions, and provide the qualifications needed to become trustee ready. It is open to participants from all walks of life, including those without previous pension experience.
Launched in partnership with the Pensions Management Institute, the two-year programme starts in April 2024. It has been designed with flexibility in mind, putting people in control of their learning, so they can study around a job, caring responsibilities and any other commitments.
This comes at a time when the pensions minister recently acknowledged a “lack of supply” of professional trustees, and a need to “update the trustee toolkit”.
We would welcome other providers joining forces with us, or launching their own programmes to increase diversity in our industry, with the ultimate aim of improving outcomes for all members.