Consumers will invest more in their pension if they are aware it is protected by the Financial Services Compensation Scheme, new research indicates.
The research, undertaken by Populus for the lifeboat fund, surveyed 2,067 UK adults from 25 to 28 May 2018.
It looks at consumer expectations about what pension providers should do to explain the protection that is available for their products.
The findings show 80 per cent of respondents would feel “more reassured” by a pension provider that prominently communicates the fact that its products are FSCS protected.
It finds 29 per cent of people would invest more if they knew that their pension fund was fully protected by FSCS.
On average, each person within that group said they would invest a further £1,493 each year.
Consumers were asked about the best ways their pension provider could promote the FSCS protection.
Two-thirds think this information should be promoted on their annual statement and 37 per cent support it being communicated via their employer’s HR department.
Just under a third, 31 per cent, say the provider should highlight the FSCS protection on its website.
FSCS chief executive Mark Neale says: “We have seen with our work in the deposit sector just how important FSCS protection is in reassuring consumers and increasing their trust in financial institutions.
“This research suggests that more prominent promotion of FSCS can have a similar impact in benefiting both consumers and providers in the pension sector.
“People will save more if they are confident their pension fund is safe and firms in turn will see reputational benefits if they prominently promote the available protection.”
In March 2018 the FSCS launched launched a group representing the advisory and wider life and pensions sectors, to look at developing an industry best practice standard for disclosure.
This group will offer a benchmark on how life and pension product providers convey information about the FSCS to consumers.