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Why the government’s pensions engagement report earmarks communications strategy as crucial for the sector

Take even the most cursory glance at the UK government’s recently-published report Lessons on pensions engagement and the imperative to create better communication leaps out and slaps you round the chops.

And well it might. The responsibility to genuinely act in the best interests of your members and employees takes creativity. Regulatory obligations are vital, of course. But supporting members to truly understand their pensions – not just keep your eye on compliance – extends well beyond the important but dull confines of an annual report.

The fact that the Department for Work and Pensions (DWP) is trumpeting engagement as a leading force in the future of pensions is a clear signal that greater focus on communication is about to loom larger than ever in the sector. And the report points a big finger at employers as playing a key role here.

So, how do you get ahead of the game – and do the right thing by your members and employees?

If our experience in supporting businesses to communicate effectively has taught us anything, it’s that it’s generally counterproductive to impose wholesale revolution overnight. Quality communication depends on a cycle of strategy, execution and evolution.

If you skip the strategy and hurl yourself straight into the murky waters of execution and delivery, you’re very likely to flounder in the wrong direction. So let’s shine a light on what the report says about strategic thinking – and chuck in a few insights of our own:

Outcomes first

Great strategies are built from deeply understanding how to engage people, knowing how to influence them to act in the way you’re hoping, and collaborating with your stakeholders to agree on the outcomes.

So, what do you want your audiences to do? With pensions, your outcome might be a combination of emotional engagement – that sense of understanding and feeling in control – and behavioural engagement, such as reading updates, making decisions and logging into accounts.

Identify barriers

The DWP report wisely highlights the problem people have in seeing retirement plans as relevant and compelling enough to engage with immediately. It’s a quirk of human nature that we can’t quite wrap our heads around events years into the future. Just take a look at the environmental movement for evidence.

The literature reviewed for this report includes the Institute for Public Policy Research’s (IPPR) 2013 paper Defining Ambitions: Shaping Pension Reform Around Public Attitudes, which deftly summarises the viewpoint that ‘there’s never a good time to invest in pensions’. To generalise, younger people see it as too far away, parents are too strapped for cash and older people feel they’ve missed the boat.

Toss in all those media stories of pension mismanagement and city boys whooping it up in gilets and fast cars – and sprinkle the whole thing with a lack of pensions literacy. The cherry on top? A failure to understand what audiences care about or how much they want to know. Hey presto, you’ve baked one hell of a negative pensions pudding. A quote in the IPPR paper perhaps puts it best:

“We’ve all heard about these risks and people losing their money, but people need to be informed about the other end of the scale, where people did make money or got back what they paid in. There is no positivity about pensions, and we need a bit of that.”

A smart insight. So, to get that engagement flowing, we need to make pensions relevant and accessible today – plus, we have to give the whole concept an image makeover worthy of a Hollywood star trying to resurrect his career after being caught with his pants down.

Research by McKinsey and others has proved that purpose is now a huge driver of employee engagement. Enlightened business leaders understand that their people rally together in support of a shared purpose – and that’s a button we can also press in pensions communication.

Paint the vision

It’s a slight oversimplification but generally, it’s better to avoid fear-based messaging. Instead, entice people towards pension engagement by framing your message in a positive way – for example, by describing an ideal retirement.

Or, more accurately, ideal retirements plural, because one size certainly does not fit all.

Your vision of quitting work at 60 for a life of golf and fishing isn’t setting me aflame, when my dream includes a career change at 65 and a parachute jump at 80.

So, it’s vital to understand your audiences deeply enough to paint those visions in enticing, juicy detail, replacing all the fear and suspicion they’ve been exposed to with big dollops of positive emotion.

In other words, describing a bleak future if I don’t act now will make me shut down. Tell me you can help me to save to become a professional saxophonist and dog groomer in St Tropez at 65 and I’m all ears.

Understand your audiences

To effectively describe those visions, you have to know what they are. Audience insight comes from qualitative, as well as quantitative research, and successful communication strategy comes from mixing behaviour and analytics data with the art of listening.

Echoing a trend we’ve also seen in environmental communication, the DWP report calls for more openness and shared information, to win back trust for the pensions sector.

Because your audiences do care. An Aon piece referenced in the report says that 83% of employees whose employers give them pension contributions value this as part of their benefits package. In other words, pensions are an important employee retention tool, so make the most of them.

But translating raw data into a communications strategy needs people who understand people.

As the DWP report says, those who want to communicate about pensions should be learning lessons from consumer marketing and advertising, where the potential for big profits has prompted lots of research into human behaviour and which messages and imagery get results.

But pensions need more than an eye-catching campaign – that research should help you sift out what people really care about, so you can streamline your headline messages and nudge behaviours.

Best behaviour

It sounds cynical but successful behaviour change campaigns are created by understanding human biases – and leveraging them. And when the results we’re looking for are in our members’ best interests, surely it’s OK to go with that flow, not paddle upstream.

A Danish policy referenced in the DWP report is a perfect example of intervention in action. When people apply for a mortgage, they have to provide pension information. That nudges them to log onto the pensions system, which in turn sparks a conversation about their plans for later life. It’s an excuse to engage people, to check in with them and to help them understand.

There’s an arsenal of other behaviour change tools too, from auto-enrollment to personalisation and the cumulative effect of small gains.

Start with strategy

As we’ve already said, measurement and iteration are vital. You’ll learn about your own unique audiences as you go along, discovering what floats their boats and what drowns them.

But without a well thought out strategy, it’s impossible to course correct. Giving people pensions information regularly is a plan. But inspiring them, upskilling them and educating them takes engagement. And engagement means putting real people at the heart of pensions.