I’ve been grappling with making pensions more engaging since I started my first job as a pensions reporter in 1997.
For example, I’ve tried to bring the ‘fun’ to pensions, connecting them to the likes of Barbie, Harry Potter and Jane Austen to reach a wider audience. Readers told me that those pieces provided an entry point for a family discussion about money.
Readers are innately curious about what other people like them are doing with their money. So, another great tool is a real-life case study of someone talking about their pension’s success (or failure) that can inspire people to do (or avoid) the same.
Yet over my 28 years of reporting on pensions, I’ve also wondered why we need to have to work so hard to make people engage with a topic on which 20-30 years of their future hangs. The pension consultants still report that members typically don’t engage with their pension, they don’t have time to read pages of information, and they don’t express much interest until they reach a certain age, often when it’s too late. Hit 50 without engaging properly and you’ll have big regrets – I know because I’ve seen it first-hand among my peers.
The main obstacle is the complex pensions rules. Frustratingly, multiple rule tweaking has introduced confusion to the consumer journey, while the jargon and terminology remains awful to navigate, even for industry people – including pension reporters!
No wonder people don’t know what they should be doing or how. And pensions consultants call socialising the word ‘pensions’ and helping members understand what a pension means for them ‘a great start’. That’s setting the bar way too low.
People should easily be able to get a clear picture of where they stand and what they can do to improve their position. And it should be an enjoyable and empowering process that makes you tell all your friends and family how easy it is to do.
Setting those issues aside, I’m starting to feel slightly more optimistic about pension engagement. That’s because at a recent industry event I heard about pockets of technical advances in communications and engagement, plus exciting speculation about how AI might bring revolution.
Most pension providers now have tools which allow members to plug in information on contributions, salary and age, to estimate their pension at retirement. Some employers have created apps for workers who don’t typically check emails or read posters.
But often it’s not enough to read about pensions. We need to visualise, hear or see the message too. That’s where AI can already help, by turning written material into podcasts, for example. We’re swiftly reaching the point where if AI can do it, a human shouldn’t, and schemes, advisers and employers need to embrace this.
There’s also muted excitement building about the potential evolution of technology built off the back of the pension dashboard, with big firms now connected. This should be transformational, as long as we get people using it, which only starts next year, under current plans.
The proof of the dashboard will be in the pudding. I’m very much hoping that it’s more than a minimum viable product when it is launched. Otherwise, it could take at least a decade to make it do anything useful that moves the dial on engagement.
In the meantime, I’d like to see providers be much braver in the guidance sphere where too many hide behind the convenient ‘regulator says no’ myth.
The free pension calculator at Guiide is a great initiative, as is the Scottish Widows pension mirror. But there should be thousands of similar (and more advanced) tools to choose from. Gamification of pensions education should already be widespread to help the 12.4 million UK adults in the advice gap, in the way that Duolingo helps people learn languages. But it’s hardly used.
It’s crucial that we bring the financial wellbeing and wellness movement that is more prominent in the USA, to the UK’s retirement and savings sector. This could be done by building on open finance which we are pretty good at in the UK – seeing your pension alongside your bank account is highly engaging.
I’ve heard arguments that people who drive don’t want to see under the bonnet of a car, and that the DIY or hobbyist investor is a small group that will never expand. But I believe AI and tech advances can make
more people care enough to look under the pensions bonnet. To know how their pension is invested, what it costs, and when they need to upgrade.
So, let’s work to breed a culture of family and friends discussing savings and investment. That’s what I call the ultimate engagement goal.
