5 minute read
Soapbox
›NEIL HAWKINS
Modernising the pension message
In the UK, employers contribute over £75bn each year into pension schemes – over 5% of GDP. With the introduction of auto-enrolment, this is only set to increase. But despite the size of the industry, are employees engaging with the opportunities they’re being off ered? Are the majority just doing the bare minimum while the pension gap widens?
To address these issues, the world of workplace benefi ts is evolving and now off ers a lot more than just pensions. Many employees have access to more fl exible ‘platform’ packages which they can tailor to their specifi c needs and attitudes to saving.
Driving these developments is the changing workplace, new and emerging technologies and, to a large extent, regulation. Autoenrolment hasn’t just changed the rules and started bringing more workers into pension schemes; it’s also led employers to revisit their workplace benefi ts provisions. In doing so, many have realised a ‘one size fi ts all’ solution is no longer enough.
Platform alterations
Employees have diff ering needs and attitudes towards saving. So the fl exibility of corporate platforms – off ering pensions, ISAs and other investment options through one online service – puts them at the forefront of developments. Online services are also ideal for hosting helpful tools, fi nancial education and other information.
The aim of platforms is to give people a consolidated view of their planning and an easy way to monitor and manage their savings. However, fl exible new schemes and swathes of newly enrolled members don’t guarantee success. Taking auto-enrolment as an example, how many employees will pay in more than the minimum required?
Unless members focus on their retirement planning, few are likely to take that extra step. To turn this around, the industry needs to maximise its engagement eff orts. The best ways are through clear communication and helping people follow up on their intentions.
Using techniques developed in behavioural fi nance, we are starting to see schemes adopting the ‘save more tomorrow’ approach where, when their employees join a scheme, they can sign up to automatic future increases in their contribution
Neil Hawkins says embracing modern solutions is the best way for the pensions industry to engage employees with their workplace benefi ts
levels. These increases will usually tie in with pay rises, making sure members stick to their good intentions and don’t use the extra money for short-term temptations when the time comes.
Whatever a scheme’s benefi ts, good communication will be key in building the employee engagement needed for a successful benefi ts package. Traditional pension literature has been a mixed bag, sometimes clear and concise, often complex and impenetrable. But even with well-produced material, how many people take the time to read it?
Online engagement
Some pension schemes have made big steps online, fi nding fresh ways to present information and providing tools and other material to bring the details to life. Online services are convenient too, but research shows that in fi nancial planning what people really want is someone to talk to.
That said, market researchers Mintel found only 17% of people would seek advice from a fi nancial adviser. They are perceived as experts, but expensive – 40% of those surveyed prefer to discuss things with friends and family, and much of this interaction takes place online.
Pensions tend to have limited audience appeal, but the popularity of these sites could be a way to capture hearts and minds. Across all sectors, people use social media to research products through consumer websites and social networks. Consumers feel they are communicating with people they trust – their friends, families and online peers.
In the workplace benefi ts market, online pension scheme communities can help overcome many hurdles. Pensions often instil fear but social media lets people ask questions without feeling stupid. Discussion forums, fi nancial education and webinars can all build knowledge, confi dence, engage people with their scheme and help them make fi nancial decisions.
Of course, there’s little point using social media solely because it’s in vogue. Providers can give information but not advice, and the risks of following ‘advice’ from a non-qualifi ed person are obvious. Pension scheme moves into social media are understandably being made with caution. They need to be relevant, continually updated, and carefully monitored. But pensions are a pressing concern, and it’s only by off ering a modern solution to this modern problem that employers and providers can truly engage with scheme members. Neil Hawkins is fi nancial education director at Friends Life
SIAS Annual Dinner
Friday 22 November 2013 at 18:45 Come join the masquerade
This year, join us in escaping the offi ce and immersing yourself in the glamour and excitement of a masquerade ball. Returning in 2013 to the dazzling Old Billingsgate Market, the SIAS annual dinner promises to be a lavish evening of delicious food, thrilling entertainment and scintillating company.
The evening includes:
•A Champagne reception • A seated three-course dinner • Entertainment throughout the meal • All-inclusive house wine, beer and soft drinks • A live band followed by DJ and disco • Photo booth to complement memories of the evening
Dress code
The dress code is black tie. Since the theme is ‘masquerade’, any special eff ort made in this regard will be appreciated.
Tickets
There are an unprecedented 900 tickets available for this year’s event. They are priced as follows: SIAS members: £70 Non-members: £85 Tickets will be sold on a fi rst-come, fi rst-served basis, upon receipt of completed application forms. Tables are arranged on the basis of groups of fi ve. If you apply as part of a group of fi ve, you will be seated with the others in your group. If you apply as part of a group of fewer than fi ve, we will need to combine your group with another in order to arrange seating. As a result, we cannot guarantee immediate acceptance of groups with less than fi ve people – we will need to wait until we can locate a suitable group to seat you with.
