The pensions industry is falling short in supporting social mobility, with individuals from working-class backgrounds facing significant barriers to career advancement, according to new research from NextGen Pensions.
The report titled ‘Supporting Socioeconomic Diversity in the Pensions Industry’ highlights how education, family background, and geography shape career opportunities.
The findings show that 16 per cent of respondents attended fee-paying schools, compared to just 7 per cent of the UK population. Additionally, 96 per cent of privately educated participants went on to higher education, compared to 81 per cent overall, and 25 per cent achieved a Master’s or Doctorate.
Meanwhile, around 60 per cent of respondents had parents in professional or managerial roles, while 33 per cent had parents in manual or technical jobs. People from working-class backgrounds were more likely to feel their upbringing affected their career, with 26 per cent saying so compared to 17 per cent from professional backgrounds.
Focus groups revealed concerns that some diversity initiatives lack depth and fail to address socioeconomic barriers.
NextGen director and chair Mark Ormston calls for the pensions industry to address socioeconomic diversity, pointing out that technical qualifications often limit access for working-class individuals. He urges better entry-level roles, clearer career progression, and collecting socioeconomic data to support diverse talent.
Ormston says: “Just like recognising the importance of diversity in gender, race and disability, understanding the socio-economic make-up of our industry is crucial for identifying opportunities for growth, and promoting equality. Enhancing social mobility is vital not just for the benefit of individuals, but also for the health and productivity of the industry as a whole.
“As the pensions industry is notoriously technical, and with many career paths requiring specific entry level academic requirements, these kinds of educational trends are perhaps unsurprising. They do however raise questions around how pension careers are being presented to potential candidates, which should give employers real food for thought.
“Focus groups highlighted the clear benefits linked to growing up with more financial stability and with parents who can pass on financial and cultural capital. The biggest differences identified by those who grew up working class were not just a lack of opportunities or network, but also lower confidence levels as a result of having larger penalties for failure in comparison to middle class peers.
“Our findings truly serve to highlight the extent to which family background can impact career trajectories. Participants who identified as coming from working-class households deemed the biggest challenges when entering the industry to be a difference in self-expression – such as being told they are being ‘too direct’ – and not having a network. But there were clear positives too, with lots of working-class participants acknowledging that they had had to be more inquisitive early on, in turn supporting personal development.
“With upbringings so often affecting how people perceive their potential in the workplace however, we simply must enhance entry-level roles to ensure we’re nurturing all future employees and improving visibility of the progression opportunities. This is crucial to attracting and retaining diverse talent.
“It’s perhaps unsurprising to see that, while people are prepared to move for work, many choose to remain within economically vibrant areas. At the same time, the fact that those who hail from London are typically more financially satisfied could indicate that it is more difficult to move from a less affluent area to a more affluent one. This may be why we see a high correlation between those who were born in affluent areas now working in economic hubs like London.
“Where a person from a less affluent area does manage to make that move, we do worry this could be adding to a ‘brain drain’ in those less affluent areas and that these individuals may feel they have fewer connections if they did not grow up in a similar area.
“We urge employers who aren’t doing so already to collect relevant socio-economic information about their workforce and stand ready to support them in driving positive change across their organisations. Even small changes and efforts to be more consciously aware of social economic factors on a daily basis would likely go a long way to help the pensions industry become a more inclusive and thriving environment for us all.”
