Engaging with pensions at timely moments

• Context
• The study
• Key findings
• Points to consider

Context

Since the introduction of Automatic Enrolment into pensions (AE) in 2012, participation in private sector workplace pensions increased but there has not been a similar increase in the amount of people engaging with their pensions. This makes it harder for individuals to plan appropriately for retirement. Despite AE relying on inertia, there are several areas of the UK pensions system where people may need to make choices, including whether to save above AE minimum levels, whether to combine their pension pots, and how to access their pensions when they come to retire.

The purpose of this research was to understand how to encourage people to engage with their pension, make decisions where necessary, and plan appropriately for retirement. This will inform a range of policy work.

The study

The study comprised a range of methodologies including teen stories, online communities, friendship sessions and groups as well as a nationally representative Generations Sur vey of 2,000 people, comparing 18-year- olds to other age groups and cohorts. The research was self-funded by research company The Nursery.

Key findings

• Understanding of and engagement with pensions varied across participants and between different age groups.
• Many participants felt they had no control over their pensions, either due to lack of knowledge or due to external factors, e.g. government policy or financial markets
• Various life events were identified by participants as prompts for pension-related actions such as milestone birthdays, getting older, changes in their family arrangements including getting married or divorced or having children, or events that signified changes to finances such as starting a new job or buying a house
• The research found that there is no single approach that would work for all with regards to communications preferences. For example, mixed views were expressed about letters and emails, communications over the phone, or text messages
• Many, especially those in the 18-24 age group, anticipated having more engagement with their pensions in the future
• Younger participants expected to pay more into their pensions in the future, whereas older participants wanted to seek financial advice

Points to consider

• Methodological strengths/weaknesses: There is an accompanying technical report available which considers limitations to the methodology such as the possible difference in conducting groups online versus face to face, the fact that the research took place during a period of high inflation which may change how people felt about their pensions, and the fact that researchers were DWP staff which may have limited how respondents answered. The report details how these potential limitations were mitigated.
• Applicability: Applicable to government, policy makers and pension providers.
• Relevance: Highly relevant given the need for people to be more engaged with their pensions.
• Generalisability: The research covers a range of age groups but is not intended to be fully representative of pension holders in the UK.