Workplace Pensions Director
Workplace Pensions Director
Considering challenging economic times in a post-pandemic world, it’s clear to see that life has changed at pace. As the cost of living rises, consumers are facing tough choices on how to manage their finances, and so it’s increasingly important for businesses to adapt to consumers’ changing needs.
Our 2022 Retirement Report tells us that four out of five people expressed concerns about making ends meet. So, consumers may be more likely to reduce non-essential spending.
Due to the pensions’ knowledge gap, without specific guidance, there is a risk that some view pensions saving as a non-essential expense. Despite this, we haven’t seen major reductions in pension contribution, and few members are planning to reduce their contributions. In many cases, contributions have risen because of inflation-based pay rises. So, what can we learn from the rising cost of living environment and how can we help?
Cost of living isn’t a pension-centric challenge, and being part of Lloyds Banking Group (LBG) means we can take a holistic view of member challenges.
Our 2022 Retirement Report tells us that 35% of respondents have reduced spending on leisure, and 16% have cut back on essentials. With this in mind, as the rising cost of living pushes more people into financial vulnerability, we leverage the access we have across LBG to spot emerging vulnerabilities. So, vulnerable customers only need to tell us once about their needs, increasing our ability to support members sooner. In fact, 75% of vulnerabilities that we’re aware of have come through other channels in LBG.
Improving education around pensions is key in deterring savers from making decisions that will make them financially vulnerable in retirement. Meeting members’ changing needs has enabled us to innovatively engage members through our Expert Sessions videos, breaking down key topics into easily digestible content. We also relaunched our wellbeing assistance and created new cost of living content on our Be Money Well site, including guides on managing everyday spending.
This is one of the most viewed sections within our app, showing people are actively seeking support. And of course, you can’t beat face to face conversations, so after taking feedback from employers about what’s important to them, we ran cost of living sessions providing tailored support.
We know that members are keen to learn more, as a recent session found that 100% of attendees were interested in attending future sessions. It’s down to pension providers to educate members, and Pensions Engagement Season and Pensions Awareness Day provided great opportunities to educate people on pensions saving.
Women and Retirement Report
Our annual Women and Retirement Report demonstrates the importance of targeting demographics in a tailored way as people engage differently. Listening to members is key, and it’s important not to assume how members will react.
Despite the general increase in digital journey usage across all sectors during the COVID-19 pandemic, we didn’t see members significantly change behaviour. For example, digital fund switching remained relatively flat during market turbulence. So, the COVID-19 pandemic told us we need to engage consumers beyond just pensions in a way that meets their personal needs.
Whilst pension contributions have been resilient across our customer base, savers may face further challenges as the cost of living increases, and regular expenses like mortgage payments rise. Education around pensions savings and broader finances is important, and even more so amid the rising cost of living. It’s vital to respond to and help consumers in a way that meets their needs now, and in the future.