I recently spent a few days on the Pension Awareness Day bus as it travelled through a number of UK cities spreading the word about all things pensions.
My experience on the bus can only be likened to that of a pension equivalent of TV’s embarrassing bodies – people with questions they were either too embarrassed or scared to ask were quite happy to come aboard the big blue bus and ask a bunch of strangers. Thankfully, that resulted in an interesting and varied journey.
It will come as no great surprise to anyone that many of the visitors had very little awareness of their pension(s) and I lost count of the times I was told pensions were just too complicated. Questions were incredibly varied – from the most simple to the most complex and all shades of everything in between.
I was asked about what a pension is, starting a new pension, tracing lost pensions, overseas pensions, state pensions, pension freedoms, auto-enrolment, pension consolidation, defined benefit transfers, commutation rates … the list could go on.
One observation well worth making is how many people were confused about information they had received about their pensions. Whether it was from the state, a provider or their employer, people commented on alien language, general confusion and an uncertainty of where or who to turn to for answers.
People at opposite ends of the age spectrum came and spoke with us. So I saw plenty of older people wanting to know about their state pension entitlement, pension credits, topping up their state pension, deferring their state pensions and some even looking to take their pension overseas.
And, at the opposite end, I saw a lot of younger people wanting to know about auto-enrolment, paying higher contributions, setting up a private pension and how much they needed to save to achieve their retirement goals – all rather encouraging really.
If I had to pick out three key reflections from my time on the bus, they would be:
* PensionWise should be doing so much more
I met a number of the PensionWise advisers on the tour and was impressed with their knowledge and approach to offering guidance. It was hugely, however, disappointing that I cannot even recall one visitor to the bus who had used or was even aware of the free service.
As part of the government reforms to the pension guidance service, they must address the need properly to promote and direct people to this free guidance service to help people better understand their options. In turn, the revised pension guidance service must find a better way of handing people off to an appropriate regulated adviser where the need is identified.
* Let’s get the basics right
The state pension was the subject of most visitor questions and for many it will be their major, if not only, source of retirement income. It was clear many people had no idea what state pension they were going to get and when they were likely to get it.
The government needs to be more proactive in telling people what income they are going to receive in retirement – it really should not come as a surprise. Perhaps it is the government and the Department for Work and Pensions who need to take on the baton of the pension awareness campaign in future years.
* It’s good to talk
There is absolutely no doubt most people who visited the bus left knowing the answer to their question or with information that will help them achieve a better retirement outcome. Many of the questions we were asked were prompted by communications people had received that they either did not understand or simply found too much.
Existing communications and engagement strategies simply are not working well enough. We need to recognise the new world of pensions requires much greater personalisation – everybody’s retirement will be different. We must embrace new technology, guidance and advice to deliver more and better choice about how people engage with their pension and should not lose sight of the fact many will want or need to be directed to the best course of action – but that need not come at a compromise to personalisation.
Andrew Pennie is head of pathways at Intelligent Pensions
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