Overcoming the pensions PR problem
- 29 Jun 2018
Following the recent rollout of Automatic Enrolment (AE), 78 per cent of employees across the country are now enrolled in a pension scheme. While the uptake is fantastic, with it comes reams of paperwork. It is this overbearing paperwork – full of complicated industry jargon – that makes the pension industry inaccessible for too many self-employed people. With this inaccessibility preventing many from saving for later life, something needs to be done. IPSE’s latest report – ‘How to solve the self-employed pensions crisis’ – outlines the means of overcoming this barrier.
In the past, pensions were sold by an advisor as part of a financial package. However, if self-employed people want to set up a pension now, their accountant may be able to help with some terminology, but they will still be required to select a platform themselves. The cost of financial advice is a barrier for many, meaning self-employed people who can’t afford access to this guidance struggle to engage with the industry. As a result, too many are being isolated from pensions marketing.
While the UK has a very competitive pensions industry, a view commonly held by many of our focus group participants was that they did not feel valued by providers. Similarly, only a third of over 1,000 survey respondents said that they trust their pension providers. Both are proof of how disconnected the self-employed feel.
However, there is hope. One participant talked about how their pension provider often hosted interactive webinars to engage members, which helped to improve relations and provide clarity over any issues. There also needs to be a positive emphasis made for saving for later life. The self-employed already accept a lot of risk when they decide to go self-employed, but they do so because of the opportunities available.
Providers need to tap into this mindset. Rather than focus on the risks of not saving, which we hear about regularly, providers need to do the opposite. Adverts and marketing campaigns should paint a more positive picture of the benefits of saving for later life. People gravitate towards positive messaging and it is important that the pensions industry does so too.
For example: 'A solid pension would allow you to travel' or ‘A good pension would allow you to leave money for your grandchildren’, would be well received by many.
The Government also has a role to play in dealing with this. While pensions language deters many people, our ComRes survey showed it was clear that the self-employed trust Government guidance. If the situation is to be improved, the Government must provide free and straightforward guidance for the self-employed.
The positive impact of overcoming pensions’ PR problem cannot be underestimated. When Liverpool Victoria reduced their pension pack to one page, there was a 10 per cent increase in the number of people visiting the Government’s Pension Wise guidance service. And that is why simplifying documents and terminology and is an easy way of overcoming the pensions PR problem and helping the self-employed save for later life.
Meet the author
Political and Economic Adviser
Find out more about our work