By Rona Train, Partner at Hymans Robertson
Personally, I’d love to see the Money and Pensions Service launch some engaging video content on Tik Tok or SnapChat, perhaps using a well-known social media influencer, to make pensions more accessible to the masses, and particularly to the Gen Z.
Let’s not beat about the bush - one of the difficulties we as an industry face in communicating with pension scheme members is that we are generally bright people who are highly numerate and literate. We are also, dare I say it, mostly well paid and don’t struggle to put food on the table at the end of the month. I often reflect on the fact that we regularly implore people to “save more into your pension” but we forget that the choice to do so could mean that people don’t have enough money to pay their rent at the end of the month. This has become even more of an issue during COVID due to the significant number of people who have been furloughed, particularly at younger ages.
Helping people understand that their pension is not “lost” money
Recently, I had the pleasure of chatting with the wonderful Janette Weir of Ignition House. She’s spent many years talking to real pension scheme members and listening to their thoughts on their pension savings. She told me that most individuals don’t even know that their money is invested, let alone where. For many, the money that comes off their salary every month for their pension contributions is seen as a bad thing. It’s money they “lose” every month, in the same way that they “lose” the money they pay in taxes and national insurance. Clearly, we are not doing a good enough job in helping people understand that this is not “lost” money, but money that they are saving to make their future better.
I was delighted to see that master trust Cushon is introducing a monthly text message to members to let them know that their pension contribution has been invested. Providers in Australia have been doing this for many years and it’s genuinely helped people feel closer to, and interested in, their pension savings. All pension schemes and providers should be working together to introduce this for UK DC schemes.
Now more than ever, we have a great opportunity to better engage our members using positive stories on responsible investment too. Millions tune in to watch David Attenborough’s programmes on the impact of climate change and many are making real changes to the way they act in their daily lives.
“Your money helped to convince oil company Shell to link top bosses' pay to the company’s carbon emissions” – what a great news story that is! And “your savings helped to make the company who makes Ariel, Pampers and Head & Shoulders disclose more information on the impact of their use of palm oil on the loss of forests”. These are real, live issues that people can relate to.
Not only is this likely to make individuals think that their money is doing good, but critically it lets them know that their money is being invested in something tangible, not just being put into some amorphous pot with the company where they may never see it again. Using some simple numbers, we can also show members what a big difference their pension savings can make to the environment compared with re-cycling or eating less red meat. It’s not just a good news story – it’s a great news story for members and the planet.
And, finally...
Coming back to Tik Tok. If we do want to get a younger generation engaged in “our” world, perhaps we do need to work centrally to find media that will create both engagement and trust. Artificial intelligence and machine learning are powerful things and can be used for good. Let’s embrace them rather than let them frighten us.
We might never get every individual interested in pensions. But I have hope for the future.
I recently made an attempt at writing pensions sea shanty….it’ll never make it to No 1 as the Wellerman version did but if it can engage even a small number of young people better with their pension savings, I’ll be happy. You can see it on my Linkedin - but remember your earplugs!
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