Pension Inertia? Communicate Better To Drive Engagement

Retirement planning is alarmingly low worldwide. In the U.S., nearly 60% of employees do not have a retirement account. Across the pond, only 43% of U.K. employees are confident they’ll retire at the age they want. The current solution? Automatically enroll employees in a pension fund.

But auto-enrollment fails to get to the root of the issue: most members forget about their plan once they’re set up. In the past year alone, 67% of UK members did not log into the account.

Providers are now facing pension inertia, where members have a plan — but never make changes to it. This lack of member engagement comes with consequences. Savers are missing out on opportunities to make the most of their plan. Even worse, they’re at risk falling into a retirement savings gap.

To improve engagement, pension providers need to reach today’s digital-first members with digital communications that empower them to play an active role in their pension and take better control of their financial future.

From making your message visual to adding personal touches, we’ll show how providers can keep communication clear, accessible and insightful for more effective engagement. Ready to get the ball rolling? Keep reading.

How Providers Are Tackling Pension Inertia

While auto-enrollment is on the rise, member engagement is a standstill. Pension providers are thinking of what else can be done to encourage members to interact with their plan. New strategies include:

  • Awareness efforts: Awareness is critical to increasing engagement. Efforts include the #PensionAttention campaign in the UK: a cross-industry collaboration to encourage savers to think about their pension and make active choices. Other awareness efforts include the Great Pension Treasure Hunt and Pension Awareness Day.
  • Government initiatives: In 2012, the UK government made it mandatory for employers to automatically enroll eligible employees into a workplace pension scheme. Ireland plans on introducing their own auto-enrollment plan in 2024.
  • Tighter regulations surrounding financial services communications: The FCA (Financial Conduct Authority) recently set a new standard for communications among financial institutions. The Consumer Duty requires firms to clearly communicate products, services and more with customers.
  • Video pension statements: The pandemic pushed many to start managing their finances online, and providers are catching on. A majority of providers now send pension statements via video to reach members on the digital channels they’re always on.

All in all, communication is key to helping members understand and take control of their pension. But what else can providers do to improve their digital communication? We dig into other tactics providers can implement to boost engagement below.

Personalization for More Meaningful Pension Communications

Pension providers are now moving processes online to reach their digital-first members. While information is more accessible, though, members don’t find it more engaging.

Why? Retirement planning often talks about the future: a vague and complex point in time. Talking about the importance of saving for the future fails to resonate with most members.

To add more meaning to your pension communications, create a message that doesn’t just speak about the future, but your member’s future. Are they set to retire at the age they want? Are they making the most of their pension pots?

Personal touches like these not only spark the interest of the viewer, but make a compelling case for the value of pension plans. Take a look at how BBVA leveraged this strategy with this video message personalized to every viewer.

Viewers hear the message from who they’re most likely to pay attention to: themselves. Their “future self” thanks them for making contributions to their pensions. Plus, the video includes personalized recommendations for contributions — giving every member actionable steps they can take now to save more. BBVA saw long-term savings increase by 78% as a result of the campaign.

But personalization doesn’t stop there. Think about the touchpoints where your members are most engaged. This is when communicating with them matters most — add personal touches to the following moments to make them even more impactful:

  • Onboarding: Make sure members are aware of everything your plan and brand has to offer by showing what options are available to every member.
  • Real-time statements: Give a snapshot of where every member is in their retirement plan.
  • Contribution nudges: Show customers how changes to their contributions can impact their future savings.
  • Consolidation nudges: Encourage action by sharing timely opportunities for members to consolidate their pensions.
  • Leavers and retirement options: Make it simple for members to retire or rollover by walking them through the process — personally.

Another way to leverage personalization in pension communications? Show how every member’s personal investments are impacting the world around them.

This is especially important for engaging younger generations. A whopping 99% of millennials are interested in sustainable investing, while 4 out of 5 zoomers consider environmental impact when investing.

Take this video from Aviva as an example. Imagine it shows how each member is making an impact with their investments. For instance, showing what specific investments each member is contributing to, how much paper they’re saving by signing up for digital notifications and more.

Now, viewers have insight into how their pensions are making a positive impact on the environment — and can feel confident their investments are in line with their values.

Make Pensions Fun With Gamification

Let’s face it: pension communications aren’t the most exciting. This is especially problematic among younger generations, who are accustomed to a digital world that’s interactive, immersive and exciting. Pension communications often fall flat in comparison to the rest of their web experience.

But finances can be fun. Just take a look at the fintech industry — a fan-favorite among Gen Z. These neobanks and startups offer gamified experiences, from earning points for meeting financial goals to finding digital easter eggs.

Gaming elements like these take the stress out of topics like investments, taxes and more. Plus, research shows gamification can increase user engagement.

Case study

How a leading bank used Personalized Video to encourage retirement planning

Pension providers can apply the same strategy to their own digital communications. Encourage younger members to get involved with their pension from the start. Give older members a new experience to change how they think about their plan. The options are virtually limitless, but here are some ideas to get started:

  • Badges: Did you sign into your account more than 3x a month? Are you coming up on 5 years as a member? Give members fun badges for milestones like these as a reward for their engagement.
  • Progress trackers: Show how close, or far away, members are from reaching their financial goals. It can help them identify gaps in their plan and encourage not only more engagement, but smarter engagement.
  • Interactive calculators: Help members make informed choices about their contributions with an interactive calculator. For instance, members can input specific contributions — and the calculator generates what age they’ll be able to retire by.

Create a Clear Message With Visuals

If members struggle to understand their pensions, they’re unlikely to engage with it. Unfortunately, a look at the numbers shows this is the case for most members.

For instance, only 1 in 5 employees feel confident in choosing the right plan to reach their savings goals. Another survey shows 53% of employees point to retirement saving as where they want the most help from their employer.

But enhancing your members’ financial literacy can be difficult. Pensions are full of complicated details, and trying to explain everything a member needs to know can lead to information overload.

To break complex details down, make your message visual. This can be:

  • An infographic highlighting important dates during the fiscal year.
  • A carousel explaining the different types of investment options.

Among the visuals available, video works especially well. In fact, research shows consumers are 3.5x as likely to prefer video when a brand is explaining complex information. Take a look at how Standard Life broke down its members’ pension statements with the video below.

It’s not only easy to follow, but also covers everything the viewer needs to know about their pension statement at a glance. Videos like these give members a better understanding of their pension, increasing engagement and reducing calls to your customer service. We’ve seen self-serve videos like this reduce call deflection by 73%.

Tip: With the latest technology, you can make videos like these interactive — and turn engagement into action. Members can click the desired link straight from the video, like changing their contribution, signing up for paperless notifications and more.

Engaging Pension Communications for Your Members

The key to overcoming pension inertia is better engagement. Create a message that every viewer resonates with. Use gaming elements to get members actively involved. Make it visual so it’s easy to follow along.

If you’re a small business, engaging every employee or member can be done on an individual scale. But if you’re a business with an international staff, or a large-scale pension provider, you need to be able to engage your members at scale. We’re making it possible with our Next Generation Video Platform, able to drive an 18x uplift in conversions and 2x pension account activations.

Curious to try it out? Set up a 15-minute call to speak to one of our team members.

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