Using data and insights to help more people retire better
Claire Thomson
Head of Employer Experience
Employers have an important role to play in helping their people build a better retirement. But how many have a clear picture of how employees are engaging with their workplace pension?
Who is saving enough? Who is making the most of the benefits available to them? And where might employees be making decisions, such as reducing contributions or taking career breaks, without fully understanding the impact those choices could have on their future retirement income?
These questions have never been more important. With 31% of people at risk of pension poverty*, greater insight into contribution levels and retirement readiness can help employers provide more meaningful support where it’s needed most.
Better decisions start with better insight
The challenge for employers - and providers - is that meaningful action starts with meaningful insight. Without a clear picture of what members are, or are not, doing, it is more difficult to provide the right support, information and guidance at the right time - and in the right way.
Just as insightful is employers understanding how their scheme compares with others across the same industry and what their peers have tried and where they succeeded in the engagement challenge.
This is where data and insight tools can make a real difference, looking at how groups of people save within a scheme without compromising their individual right to privacy.
We’ve been working closely with some of our larger schemes to help them better understand member behaviour and identify where particular groups of employees may need additional support. By combining scheme and member engagement data, benchmarking and governance information, employers can get a clearer picture of retirement readiness across their workforce.
Data can be viewed across different groups, including age, gender and pensionable salary, years in scheme, fund value and years to retirement. Benchmarking allows employers to compare outcomes against similar organisations within their sector.
Those insights can be incredibly powerful, for example by showing if women are lagging in how they are saving, or younger workers are not engaging early. It gives employers a golden opportunity to help to address this.
Insights can clearly highlight opportunities to improve engagement. For instance, the data may show that some groups are not using their pension app to review their savings or nominate beneficiaries. In these cases, targeted communications, such as ready-made campaigns or email nudges, can help encourage positive behaviours and greater engagement.
Real-life example
One of the largest schemes using our insights tool recently joined the Scottish Widows Master Trust and was keen to gain a deeper understanding of its pension scheme and member behaviour.
Working closely with the relationship manager who shared the insights, it identified groups of employees who were not taking advantage of salary exchange despite being eligible to do so. Through its ongoing governance activity, the issue was brought into focus, leading to a targeted communication campaign to encourage greater take-up of salary exchange.
It highlights an important point: pension members are not a uniform group. Different employees face different challenges, engage with their pension in different ways and may need different levels of support.
Our insights continue to evolve. We’re constantly refining, enhancing and expanding what we provide, shaped by the valuable feedback we receive from the schemes and advisers we work with.
We’re now rolling these insights out to more schemes and working closely with their advisers to help a growing number of employers better understand their workforce and identify actionable opportunities to support improved retirement outcomes.
The better we understand these differences through real data and insights, the better placed we are to help more people build their retirement savings and improve their prospects for the future. Ultimately, that's something we can all get behind.