Workplace Savings – Isio Blog 2
Workplace Savings - An Isio blog
Blog 2, October 2020
Why aren’t your employees engaged with their pensions?
We all know that people aren’t as engaged with their pensions as they are with, say, football or social media. The Scottish Widows Retirement Report 2019/2020 shows that 49% don’t feel they are preparing adequately for retirement. And only 34% of people feel optimistic about it.
Why? Just some of the reasons cited…
- ‘‘I don’t understand my pension’’
- ‘‘Documents are huge – way too much information and choice’’
- ‘‘I have other more pressing (or exciting) financial commitments’’
In response pensions providers have gone wild with solutions such as member ‘micro-sites’, pension apps, and personalised videos. But there still seems to be a ‘pensions paradox’.
- Member engagement with pensions is low
- We know possible reasons for low engagement
- Pension providers have tried to fix it
Member engagement is just as low! So why does this paradox exist? Simply I believe that while members are given a load of tools, absolutely none of them help them to set their own retirement target. Certainly not one they can ever hope to achieve.
According to the PLSA, 70% of savers say that targets would help them save more. There is no reason why providers along with employers and advisors can’t help members to set a retirement target. Take the PLSA’s Retirement Living Standards: pitched at three levels this can guide members to target precisely what their retirement could look like (and what it will cost them). Make the target really personal, and member engagement could suddenly look very different. Does your pension scheme help members to set their own target?