Three key messages found to be vital part of the solution
Whilst communications alone cannot overcome all barriers to engagement with retirement income planning, it’s believed that the practical approaches identified by this research could help empower individuals to take meaningful positive steps by boosting confidence, addressing knowledge gaps and making a daunting task feel more manageable.
Three foundational messages
- ‘You’re already on your way to having a retirement income’: People’s confidence can be boosted by emphasising what they already have, including the State Pension and any existing pension pots.
- ‘Start from today and plan forwards’: To help people understand the gap they need to close, people should be encouraged to start with what they know, considering their current financial situation and then planning forwards.
– Over two thirds (68%) feel a good retirement plan should start from your current financial situation and plan forwards.
- ‘There are steps you can take’: As well as providing some realistic next steps that they can take, it’s important to help people realise that they don’t need to solve the problem all in one go – and that it’s not too late for them to make a meaningful difference to their life in retirement.
One concept from the research that proved positive was the notion of a “financial MOT” for people at this stage of their lives. A pensions MOT service is already available but awareness of this as an option appeared low. People liked the idea of a planning checkpoint that’s regular but will not take up too much of their time. For example, a message that suggested people sit down for 30mins once a year was more positively received than suggestions of people sitting down on a “regular basis”. People appeared to value an approach that broke down their problem into bite size pieces, with a message of taking one step at a time rather than solving it all in one go.
Findings reveal striking change in people’s intentions
When asked before and after reading the messages developed in this research, significant increases were seen in the proportion of people who said they were likely or very likely to take action in the next six months:
› Likely to use online tools such as retirement calculators: from 29% to 51%
› Likely to set a retirement income or pension savings goal: from 23% to 40%
› Likely to check the balance of my pension pot: from 52% to 69%
› Likely to increase my pension contributions: from 16% to 39%
Jo Philips concludes:
“Whilst we know that the actions people say they will take do not always happen in reality, the level of change in people’s stated intentions after seeing the optimised messages was quite striking. These results give us reason to believe that communications using these foundational messages can help drive a positive change in the number of mid-working-life savers planning and preparing for retirement and help more people to achieve financial security in later life.”