Pensions and the young

Although auto-enrolment has helped put pensions on the radar of younger generations, it will come as no surprise to anyone that it’s still far from a priority. Faced with a limited disposable income, the need to pay off a student loan, increased living costs and saving for a house deposit, many younger people are ignoring the long-term benefit of saving adequately for their retirement.

Coming up against all these competing demands, it’s vital that the importance of pension saving is communicated in the most engaging way possible. Younger employees are used to being excited by the brands and services they interact with and in order to have an impact the pensions industry needs to follow suit. So what can we do to make pensions more exciting/engaging?

Scrap the word ‘pension’

The word ‘pension’ is incredibly off-putting to many young people who think of it as boring and something to worry about when they are old. It could be rebranded to freedom pot, life choices pot or future funding, any of these options would give the whole subject a fresh feel. This simple change to the word could mean you’re no longer discussing the boring and complex world of pensions but you’re looking at choices in later life.   

Pension Awareness Campaign

The Pension Awareness Campaign is an initiative which was launched in 2014. The aim of the campaign is to alert the nation to our inadequate retirement saving and unite the financial services industry, businesses, employers and the government to share innovative ideas and work together in driving engagement with retirement saving. The main part of the campaign is a bus tour which took place between the 11th and 15th September 2017. On the bus people are encouraged to listen to short presentations, sign up to a new app where they can track how much they’ve got in their pension and engage via social media – all in a relaxed and friendly atmosphere. [1]

Financial education

Financial education is a way of improving people’s knowledge and awareness of personal finances generally, which can include retirement planning. There are many different ways of delivering financial education including online courses, seminars/workshops and one to one advice. One to one advice in the workplace is the cornerstone of Aspira’s business and gives an employee the best possible chance of having a good financial future. A big step forward was made in September 2013 when financial education in secondary schools became mandatory. Unfortunately a recent survey found that 58% of students aged between 15 and 18 did not receive any form of financial education, so it remains to be seen what impact this will have.[2]

Pensions Dashboard

It’s hoped that the Pensions Dashboard will help bring pensions to the forefront of peoples mind, as it will provide them with access to all their pensions in one place on their smartphone or PC. The downside is that the dashboard isn’t due to launch until 2019!

And finally…     

All these initiatives will move things in the right direction to help younger generations engage with retirement saving, in particular a combination of new technology and financial education could make a huge difference. But, there is no silver bullet and we need to keep working to ensure progress is made. Here at Aspira we believe in not only providing financial planning but financial education for all our clients, as we know it is simply too important to get wrong. For more info e-mail or call 0800 048 0150.

[1], viewed 18/09/17

[2] Over half of pupils receive no financial education in school or college,, viewed 18/09/17

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