New report calls for a dedicated taskforce to explore ideas for improving individuals’ engagement with their pension savings.
Improving engagement with pensions will require a “collaborative and investigative approach” across the industry, according to a report from the PPI.
The institute has called for a rethink of how individuals engage with their pension savings, involving a “segmented approach” to better cater for different kinds of savers and improve financial wellbeing.
The detailed study built on previous work by the PPI on the role of member engagement in pension savings, and set out a series of considerations and recommendations for government and other industry stakeholders.
Lauren Wilkinson, senior policy researcher at the PPI, said the way the current system was set up meant that “a significant proportion of the population are unlikely to achieve positive retirement outcomes”.
Policymakers need to consider a range of potential engagement mechanisms to support those who are “unlikely, unable or unwilling to engage, or unlikely to achieve positive outcomes through engagement alone”, Wilkinson added.
The PPI’s report acknowledged that supporting effective engagement across different groups of people would require “a substantial amount of work” as well as investment. However, new technologies and a targeted approach to engagement “could improve outcomes for some people”.
Improving effective engagement and communication would likely require “significant experimentation and refining of approaches”, the PPI said, and the pensions industry would need to balance costs carefully against the likely benefits to members.
“This is likely to be too large an individual undertaking for even the largest schemes, further underlining the need for a joined-up approach across the industry, in conjunction with government,” the PPI’s report stated.
Wilkinson called for “further investigation of segmentation”, considering those with different levels of willingness to engage and their financial capabilities, and said a dedicated “taskforce or working group” could take these ideas forward and build consensus.
