How pension freedoms have affected company pensions

This article is part of
Guide to Workplace Pensions

However, Mr. Leckridge believes that the way pensions information is communicated is partly to blame: “Trustees dangle the carrot with the information about indicative transfer value. It makes people want to look into it.”

He adds: “I believe that it is remiss of trustees to provide indicative transfer value when people haven’t requested this, and if I were the regulator, I’d say that they should not provide indicative transfer values unless specifically requested.

Workplace platforms

One of the ways in which employers have sought to improve engagement and understanding of company pensions is by introducing workplace pension platforms and portals.

Angie Kirkwood, pensions expert at Scottish Widows says: “The technology has developed more personalised approaches when giving employees information on their pensions, as well as support tools for retirement planning.

"This should help increase employee engagement and develop a sense of ownership of their workplace pension.”

And some are reporting progress − Aviva says that 65 per cent of the workplace pension members registered on its platform had logged in during the last year. 

But there is more work to be done: “Platforms are good tools for imagining what you might need in the years ahead,” says Jeannie Boyle, executive director and adviser at EQ Investors.

“But sometimes people look at their company pension and see what the annuity is going to be, and when it isn’t great, they can become demotivated.” 

Other issues include balking at the complexity of the subject and lack of interest to start with, as Mr. Leckridge points out: “There is a general apathy towards pensions, and people are put off by lack of understanding of the information provided.”

While some people switch off, others don’t bother to check out the information at all.

 “Some people take a look at these platforms and some don’t,” says Mr. Lamb: “There is a degree of indifference.”  

He also agrees that the way information is communicated is an issue, as he observes: “It’s an ongoing battle to educate people about pensions and to do away with industry jargon.” 

And when it comes to communications, it might well be that the medium itself is not relatable for everyone nowadays, as Maike Currie, director for workplace investing at Fidelity International observes: “People consume information in completely different ways from how we did 20 or even 10 years ago − finding the right medium and pitching the information at the right level is no mean feat.”

Employers have a responsibility to lead employees in the right direction, as Ms. Currie concludes

“A responsible financial services provider should be looking to take their customers on a knowledgeable journey through their working lives, and ultimately leading them into a comfortable retirement.”