Engaging young people in pensions

Engaging young people in pensions

5 minutes
Engaging young people in pensions

In our spring edition of The Collection, we look at what it takes to get young people to invest in their future. 

Here’s an excerpt of the interview with our team at Ferrier Pearce - to read the full interview download The Collection.

1/10th of 18-24 year olds admit they don’t know what a pension is or how it works. Why do you think that is?

For a large part it comes down to having more immediate concerns. Young people today are having more immediate issues around affordable housing, and that’s only if they’ve managed to secure a job in the first place. Young people are also less likely to believe what you tell them. For example, in last year’s Edelman Trust barometer only 38% said they trust businesses, so you’ve got to work harder to convince them their pension matters to you. On top of all of that, when you’re new to the world of work your pension seems so far away that it just doesn’t seem that important today. In the excitement of starting work for the first time, people don’t immediately start thinking about what they’ll do once it’s all over.

Why are younger people not engaging with pensions?

This generation grew up with smartphones, they don’t really want to read lots of pages of information. They want personalised, condensed information, highlighting what really matters to them. After all, it’s not other pension communications that you’re competing with for their attention, it’s Netflix, Instagram and YouTube. So we need to provide information on the right channels. Give people the freedom to find out things themselves online and let them manage their pension there too, the same way they’re used to with their banking. Give them personalised video statements that ask for less than two minutes of their attention and provide only the important highlights they’d search for in a printed statement. There’s no need to worry about whether people will want more of the detail, just make it easily available through your portal and they’ll find it when they need it. It’s about making things easy for your employees, and giving them a service that they’re used to. The final part of that is making sure all the above communications are available on their phone, anytime, anywhere.

What are some typical barriers to engagement in the workplace?

There’s a whole load of things that can prevent good engagement in the workplace. One of them is your employees’ happiness. In general, happy employees are engaged employees. So, what’s stopping people from being happy at work? Their health and wellbeing can be a huge factor. And it’s something you as an employer can embrace and impact positively. Neyber’s Financial wellbeing report found that financial worries are employees’ biggest concern, whilst Willis Towers Watson have also found that employees troubled by their finances are twice as likely to be in poor health as those who weren’t. That can lead to higher levels of stress, increased absence and low work engagement.

So, one big thing you can do to help lower barriers to engagement is provide a great financial wellbeing programme. This might include financial education, short, medium and long-term financial incentives, like good pension benefits, season ticket loans, and local discounts. To get the full benefit from your programme, you should also make sure it’s tied in with a wider benefits programme relating back to what your people really want, and your corporate values. And if you’re struggling to find the business case for this, just look at the research. Happy, according to Harvard Business Review, engaged workforces are raising sales by 37%, productivity by 31%, and accuracy on tasks by 19%. So, not only will you make more sales, and get more done, but the quality of your work will be better too.

Are there techniques businesses can use to increase engagement with retirement?

There’s loads of things people can do to increase engagement. Pensions can be quite dull to lots of people, so why not try to make it fun. Gamification is a great way to draw people in. (Gamification is the application of typical elements of game playing e.g. point scoring or competition, to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.) By gamifying your website or apps you can tap into the brain’s reward pathway. It’s what makes things like candy crush so addictive because you’re constantly getting gratification by jumping up levels. I promise you, swiping small digital gems left and right is not that much fun on its own. 

Animation is great for educational material. It might be hard to succinctly explain changes to your scheme on paper or verbally, but making the image visual makes it so much easier to understand.

There are also tonnes of tools out there that can help people see the impact of saving now versus later, and help them work out how much they’ll need after work. Young people might not understand the value of saving now rather than in a few years time if it’s not made clear. You can help by not making them do the maths themselves. Give them a cost of delay calculator, make it easy to find and easy to use, and they’ll be able to make a much better-informed decision. There’s so much you can do with technology now, it’s just about finding out what’s appropriate for your members and making a connection with them.

How has the digital landscape changed employee behaviour and the way companies communicate?

It’s not enough to do just the traditional communications anymore. I’m not saying you should be digital only from tomorrow, but that’s certainly the way the world is moving, and it’s important that we keep up. Often you’ll hear people talking about how they’ve got to hold onto traditional communications because some people don’t have access to a computer or a smartphone. OK, that’s fine, don’t throw it all away. But, you have to start taking a digital-first approach. 55 - 75 year olds have the fastest adoption rate for smartphones, over 90% of people under 55 own a smartphone, and 40% of adults are on their phone within 5 minutes of waking up. That’s a lot of time and money going into smartphones. Again, who are you competing with for everyone’s attention? Netflix, Instagram, and YouTube. And, where does this all take place? Online! If that’s where people are, then that’s where you need to be too.

Are there some examples of brands successfully engaging employees with workplace savings?

We recently helped Johnson Matthey create an award-winning pension modeller, which pre-populates with member details, eliminating the need to input information. Johnson Matthey was offering their members a choice of up to four new pensions savings options and they wanted to present the options clearly and concisely, enabling their members to compare the cost and potential benefits. The simple, engaging, modeller helped more than five times the anticipated number of members to switch to a new Cash Balance plan, and reduced the time team members spent explaining choices to new members. It was an easy to use, interactive tool that really helped members make decisions.

Like this article? Share it
Hayley Clark
Hayley Clark
Hayley has over a decade of experience, starting out as a journalist before moving into digital content and strategy. She has worked with clients across a variety of sectors (from property and finance to FMCG), specialising in content marketing and helping brands find their tone of voice.
Get in touch with me