Technological advancements present an opportunity for innovation in engagement, both in terms of enabling more effective communication and in enabling greater segmentation of individuals to develop more effective engagement strategies. Greater collaboration across the pensions industry and beyond will also be needed to develop innovative solutions to the engagement challenge.
Lauren Wilkinson, Senior Policy Researcher at the PPI said: “While increasing engagement is a key focus of both government and industry, a significant proportion of the population are unlikely to achieve positive retirement outcomes under the current system without changes to engagement strategies and consideration of other mechanisms.
These mechanisms are needed to support those who are unlikely, unable or unwilling to engage, or unlikely to achieve positive outcomes through engagement alone. The approach that is appropriate, be it engagement-focused or other policy levers, differs according to individual levels of financial capability and openness to engagement. Developing a better understanding of the range of needs and the varying capacity for engagement across the population is vital to the goal of delivering positive retirement outcomes for as many people as possible.
Building consensus on key goals and strategies for engagement, including best practice for data collection and utilisation, clear language to be used in communications across the industry and a standardised method for measuring engagement, could help some people to achieve better retirement outcomes. For those less likely to benefit from engagement, other mechanisms may more effectively deliver the goal of positive retirement outcomes. Appropriately designed defaults, rules of thumb and safety nets may be needed for those who are unlikely or unable to make informed active choices that will deliver positive outcomes.
Further investigation of segmentation, taking into account both openness to engagement and financial capability, could help to make engagement strategies more effective and ensure that other mechanisms are in place for those who will struggle to achieve positive outcomes through engagement alone. A designated taskforce or working group for engagement could be established to bring together key stakeholders from across government and industry in order to build consensus and develop solutions to the engagement challenge.”
PPI Report What could effective pensions engagement look like
|
