Workers failing to engage with pension provision as communication failing to hit the mark

There are new warnings that the UK must do more to drive greater engagement with the working population over their pension provision.

Research from investment experts SEI revealed what it said was a clear message that more can and should be done to drive pension engagement and ownership. It found despite positive progress with more than 10 million people now auto-enrolled into a workplace pension scheme, nearly three-quarters (74%) of workplace pension savers report low or no ownership of their pensions.

According to the “Creating an Ownership Mindset” report, nearly three-fifths (59%) of members do not feel connected to their pensions, most prevalent among those with the lowest amounts saved. Over half (52%) of those with pots between £50,000 and £100,000 said that they felt disconnected from their pensions, while three in 10 (31%) of those with pots over £100,000 indicated they felt this way.

With four in five (80%) saying they like to feel in control of their finances but just one in five (18%) saying they feel in control of their pension, the report highlighted a clear gap between contribution and ownership.

“The majority of members believe that as long as they have a pension, they will have financial security in retirement,” the report stated.

Nearly two-thirds (65%) of respondents agreed with the statement: “My employer set the pension up, and I trust that they are making sure I am paying in enough to have a comfortable retirement.” Of those currently paying the minimum employer and employee contributions, a worrying seven in 10 (70%) feel this way.

SEI said members are inherently aware that they should be doing more. Over three-quarters (78%) of members say they should know more about pensions, but this does not currently translate into action. Four-fifths say they don’t know what happens when they retire and want to take money out of their pensions.

Steve Charlton, Managing Director of Defined Contribution and Solutions for SEI’s Institutional Group, EMEA and Asia, explained: “While auto-enrolment has greatly succeeded in getting people to save for their futures, our research highlights an ownership problem when it comes to their pensions. The current engagement model has not been working well enough to shift the dial, and by all accounts, fixing the ownership gap won’t be easy. A fundamental shift in industry thinking is required.

“By focusing on engagement, we have been starting in the wrong place, driving push behaviours—such as telling, explaining, and stating—which don’t create ownership. There’s an assumption that if we just communicate more clearly and directly, people will understand it. Our research shows that this is a flawed theory and that we must foster a deeper emotional connection between members and their retirement savings.”

With four in five (80%) saying they like to feel in control of their finances but just one in five (18%) saying they feel in control of their pension, the report highlighted a clear gap between contribution and ownership.

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