The financial services industry has failed to find ways of nudging consumers to think about their options at retirement, despite three years of pension freedoms.
A panel at the Association of British Insurers retirement conference today lamented the way companies talk to people about pensions and the lack of engagement it inspires.
ABI director general Huw Evans, who chaired the panel, asked each panelist how the public could be engaged better on pensions.
KPMG wealth and asset management director Martin Rumsey says a new model on getting people to understand pensions has not been found since the freedoms took hold.
Rumsey says: “In the pre-RDR world, commission had the beauty of client engagement and fulfilment through IFAs. In the defined benefit model there was a guaranteed income for life.
“But how do you drive fulfilment and engagement in this new world? How do we replicate DB provision in auto-enrolment?”
Just Group group communications director Stephen Lowe says default guidance is the way forward because it would undercut scammers and increase trust in the pensions industry.
The Pensions Advisory Service chief executive Michelle Cracknell shares the organisation’s experience of what works when talking to people about pensions.
She says: “We would pick up two important points we have learned from our experience. The first is to talk to people at the point they need it such as death and divorce. People can be nudged to consider pensions at these times.
“The second point is many people are shy talking about money and most approach pensions from a very transactional view. You have to ask people: ‘What do you want?’ It is not about the product they buy but about them as people and the choice they want to make.”