Meaningless numbers...

calendar-54In 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.  

Sizzling sausages

retirementAnd 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.  

Emotive issues

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! 

 

Posted by Steve Butler

Topics: Employee Communication

New call-to-action
Questions

Ask The Experts

Want to get in touch?
Just fill out the form below and we will be in touch shortly.

workplace-rocket

Next Generation Savings

Changing Workplace Savings Behaviour for the Better

discover
workplace-bullseye

Consultancy

We provide consultancy services to employers and trustees on contract-based and trust-based schemes, including master trusts. Our proposition encompasses governance, investment, administration and communications.

more
workplace-governance

Governance

Establishing and governing the ideal workplace pensions and savings for your employees can be complex and time consuming. That’s where we come in.

Monitor
workplace-education

Engagement & Education

We use innovative communication channels and modern technologies to help educate, engage and inspire employees across a range of financial topics.

 

Find out more
workplace-deckchair

Retirement

With greater choice and freedom in how and when individuals are able to access their pension fund, there is now an even greater need for early education and advanced planning. Find out how we help.

Discover
workplace-graph

Investment

Our investment research division analyses and rates over 18,000 DC investment funds. The insight we have enables us to support your investment objectives, making sure they're on track to deliver.

track
workplace-health-risk

Health & Risk

Our health & risk service provides tailored combinations of cover and cost to exactly match each employer's requirements, helping you get best value for your benefits spend.

Discover