In the early stages of my career my employer used to send me an annual pension statement. I’d take a quick glance at it, and then file it away – in the bin.
Don’t get me wrong, it was nice to know I had something put away for my retirement. But I can’t say that I ever engaged with it. I was younger, and workplace pensions were simpler in those days, but even so you might have expected someone who is financially literate, in the investment business – and soon to get involved in the pension business – to have a bit more interest. The reality is that there are very few people who give those wads of facts and figures much attention, even if they know, cognitively, that they’re extremely important.
Why? Because a statement like “your pension pot has a value of £53,456.12” is meaningless without further context. Is that a large amount? Is it enough? Most people can’t tell, which goes a long way to explaining the results of an HSBC survey in 2014. It found that of those people who hadn’t saved enough for their retirement, two thirds only realised their mistake after they’d stopped work – despite getting those statements every single year. So how can companies communicate effectively around workplace pension schemes? How do you bring a boring subject like pensions (yes, I admit it) to life? In my post last week, I argued that it was important that you treat pension communications just like any other marketing challenge.
And the number one rule of marketing is this: “Sell the sizzle, not the sausage”. The idea is that people don’t so much buy a product as buy the benefits it gives them, and the feeling they’re left with. We might like to think of ourselves as rational consumers, but we’re actually not that interested to hear that “this sausage contains 52.5% pork”. We want to know that they are delicious; that they cook quickly, so we won’t have to spend our evening in the kitchen; and that when we throw those sausages on the grill, surrounded by our friends, we’re going to feel like a popular host. The same principle applies to workplace pensions.
The bottom line number showing how much is in your pot is just a piece of technical information. But it is directly related to the kind of lifestyle you are looking for, to your dreams and hopes for the future. It’s about how much time you can expect to spend with your family later in life, the holidays you can (or can’t) take, and the kind of care you will receive when you are not in the best of health.
These are genuinely emotive issues.
Effective communication around pensions will tap into that emotion. I’ve held onto one great example, a leaflet I came across in 2011 which set out what kind of lifestyle you could afford in retirement, depending on how much you managed to save. Things like: you could have foreign holidays twice a year if you’ve saved £X, or unless you’ve saved at least £Y you’d struggle to run a car. Suddenly the numbers were relevant, and people could picture what their retirement would look like. It made pensions both more concrete and more emotional.That leaflet was produced by the Department of Work and Pensions – and if they can bring emotion into it, surely we all can!
Topics: Employee Communication