Martin Palmer, Head of Proposition, Corporate Benefits - Friends Life
With that in mind, we recently undertook some rather different research, which aimed to find out how pensions savings are faring around the country. Are there areas where people are more savings-savvy? Is the income shortfall more acute in certain locations?
The UK-wide research revealed significant disparities across the UK's regions and cities.
The data also found differences in people's understanding of their future income needs. In the South West and North East, residents are most aware of the income they will need in retirement with the lowest shortfall between their likely income and housing and living costs. However, the East of England and Greater London are the least prepared and can expect the greatest financial shortfall in retirement. On average, those in the East of England face an income shortfall of £105.38 per week and Greater London a shortfall of £123.87 per week.
But these differences aside, the research underscored something we’ve been saying for some time: encouraging employees to save more is a nationwide challenge. According to the research, most savers expect to need £409 per week in retirement (which is not likely to provide for a lavish retirement!) But on average, their actual income from their retirement savings will be £312 per week.
Communicators will tell you that targeting is the key to getting a better response. But rather than regional targeting, the answer we believe lies in appropriate segmentation – something that today’s advanced analytics makes increasingly possible.
Identifying different segments based on lifestyle and behaviours can help to ensure that your communications are better received and make it more likely you will elicit a response. For example, if someone is struggling to get their children through the educational system, they may not be receptive to messages encouraging them to save more; however, seeing what their peers in similar situations are doing could nudge them into the savings direction.
Up to now, the pensions industry has not been able to unlock the potential of today’s communications technology fully, but using segmentation we will be able to target email messages to the audience. It will be possible to establish peer-groups of employees, encouraging them to question each other, and put relevant educational tools and webinars at the fingertips of those that need it. How much better to be able to access a video online on what your latest pension statement means and then register to a webinar that will help to show you ways of saving more for your retirement at that point than to read your statement, not understand it and file it.
Modern technology can play a pivotal role in improving the retirement provision of the country. Let’s start using it in a targeted way.
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