Savers who had been automatically enrolled into their workplace pension schemes did not go on to actively seek information about their pension, research from the Department for Work & Pensions (DWP) has revealed.
The research, which was conducted by Ipsos Mori and consisted of 60 in-depth interviews with participants currently saving into the default scheme of a defined contribution (DC) pension with their current employer, found that attitudes towards pensions were characterised by “detachment, fear, and complacency”, which acted as “barriers to engagement”.
It was also found that not knowing how to assess pensions and what it meant for their future acted as a barrier to engagement for respondents.
The research additionally provided insight into the current understanding of pension by the participants, as in the interview’s participants understanding of their pension ranged from knowing who their provider was to knowing how much they had saved and what their income projections were.
The DWP’s research also found that the ability to influence pension outcomes, understanding the benefits of engagement, ability to view information about their pension easily, would help motivate people to engage with their pension.
As a result of the research, the DWP stated that a low understanding of pensions amongst participants suggested that increasing understanding of pensions in an important first step to set information in pensions charges in context.
This, according to the DWP, could also increase member engagement, by helping to reduce feelings of fear and confusion in relation to their pension.
Commenting on the research, Quietroom director, Simon Grover, stated: “These findings don’t come as a surprise. Members report feelings of detachment, fear, and complacency in how they feel about their pensions, and that’s all too familiar from previous research.
“These feelings act as a barrier to effective communication and engagement. The research shows people are interested but want information in a succinct and visually engaging way.
“People also need help as to what they can do with the information and how they can use it to get a more comfortable retirement. This report shows we’ve got a long way to go in really putting the saver at the heart of the communication, so we have a conversation that is engaging and useful.”
