There is a need for clearer communication, improved information and greater use of technology to boost public engagement with private pensions in the UK, according to the Department for Work and Pensions (DWP).
The report, titled “Lessons on Pensions Engagement”, explores how to encourage greater participation in private pension schemes. It finds that “Pension engagement is a key departmental and governmental priority, but evidence shows engagement is low.”
The analysis defines engagement in three ways: cognitive, emotional, and behavioural. It highlights three key ways to improve engagement: better communication, clear information, and the use of technology like apps and dashboards.
It says: “Communication effectiveness includes making information more visible, understandable, and relevant to members as well as taking a more consumer-centric approach to communications about pensions.”
However, using technology depends on how comfortable people are with digital tools. The report also suggests raising awareness through multiple channels, simplifying information, and building trust in pension providers.
It stresses the role of members, employers, community groups, pension providers, and the government in supporting engagement.
It says: “Employers can play a valuable role as an information channel and can provide workplace interventions to engage employees with their pensions.”
The report also notes that while engagement is seen as a good thing, there is little evidence on how it directly leads to better pension outcomes.
It says: “Engagement is typically considered a positive aspect of consumer interaction. However, the literature reviewed did not explain how positive outcomes for consumers are directly caused by consumers’ engagement.”
The report calls for more research and a clear plan to boost overall pension engagement and suggests collaborating with community and partner organisations to reach harder-to-engage demographics.
