2018 saw a continued rise in workplace pensions, with many employees appearing to embrace auto-enrolment schemes. Pension scheme memberships have increased by 12.6m people, which constitutes a 29% rise over the year and a 400% increase since 2010.
But no matter how compelling the arguments are for the importance of a pension, for many people the numbers just don’t stack up. Although workplace pensions provide a great solution for some people, we predict a pension gap which private providers can stake a claim for.
This is particularly true for young people who, as shown by a survey conducted by TopCashback, are keen to save, but have a more short-term focus than pensions.
“Our research shows millennials are being sensible with their money and thinking about financial security. However, the current economic climate, and a change in lifestyle – people marrying and having children later – means millennials are favouring experiences over possessions and have different financial priorities at this point in their lives.”
“While it may be later in life and less of a priority than it was in the past, it is important for millennials to put money aside regularly and be savvy with their spending, so they are prepared when the opportunity to buy a property does arise.”
The increase in awareness of the importance of saving for retirement (thanks partly to the link style by the Department for Work and Pensions) can only be a good thing for the wider market, and search trends seem to be backing this up (Google Trends data 2013 to 2018). Products that are tailored to customers’ individual needs, and which make saving for retirement a realistic option based on their current financial situation, should find market fit.
The challenge remains for brands to make a noise in a crowded and complicated market for consumers, especially those who are looking at these products for the first time. It’s no secret how easy it is for people to become armchair experts on anything simply by Googling
around the subject, and pensions are no different. However, a recent CISI report indicates there is still a significant gap in knowledge about pensions, with 40% of respondents admitting they are not sure how pensions work.
So not only do brands need to provide options which are right for the individual and their specific situation (something that Google can’t tell them), there is also a role in providing all the information and the specific indicators that a qualified IFA would need to educate their customer and help them make an informed decision.
Brands need data intelligence and insight combined with creativity to build trust and give customers the confidence to engage. As Bill Bernbach, one of the original Mad Man wrote, “At the heart of an effective creative philosophy is the belief that nothing is so powerful as an insight into human nature, what compulsions drive a man, what instincts dominate his action”.