Challenges to enhancing employee engagement with pension savings in the UK

The whole arena of pensions and pension schemes may not get the attention from the public which it deserves. For millions of people, pensions are what they come to rely on to survive into old age. The media pick up on many incidents of unfairness and collapsed schemes, or employers misappropriating pension funds. However, there are other very important dimensions that have been overlooked, not least the lack of knowledge and engagement by employees in pension savings and schemes and the choices which could help them maximise their chances of a good outcome. This research project explores employee engagement in the context of pension engagement – the way that pension providers interact with their members. This has been exacerbated by confusions between Defined Benefit (DB) and Defined Contribution (DC) schemes and the implications for the pension holding public. The focus is firstly on the influences of context and an exploration of the literature including an undermining of confidence in pensions and other possible social and behavioural factors to be taken into consideration. Exploratory research (ER) was also carried out on two areas which are commonly believed by the sector as having some influence on employee pension engagement: (i) the influence of the language used in pension statements and (ii) the medium used. ER1 used questionnaires to explore the first area, the findings of which demonstrated that paper communications and modifying the language of these had not been successful in persuading members of the pension scheme to read the benefits statements, nor to be more proactive in seeking information to make important decisions. ER2 was carried out into employees’ experiences of face-to-face employer interventions with employees with more positive results. The purpose of this whole research is to illuminate the sector’s understanding of the low level of engagement by employees in their pension schemes and to stimulate changes that would encourage this neglected but important area of human behaviour. This neglect can result in a lower quality of life for retired employees and an increased dependency on the state because people are not sufficiently stimulated to be engaged with their pensions to make good decisions earlier. The coherent thread running through the work is my development as a practitioner and researcher with the use of first-person action research. The findings will be fed back to employers and pension providers across the industry through professional networks and publication so that different approaches can be considered to improve practice. The research has already had a significant impact on my senior roles and on my input to my employers at board level.