Pensions industry ‘hungry’ to take more account of growing diversity of scheme membership – LCP, IGG & Smart Pension

With more than 10 million workers having been newly enrolled into workplace pensions as a result of automatic enrolment, and with the changing make-up of the UK population, pension scheme membership is becoming much more diverse than in the past.

But at a recent industry event hosted by LCP, Independent Governance Group (IGG) and Smart Pension, the majority of industry leaders who responded to an audience poll said that their member communications remained relatively standardised. Encouragingly, however, around two thirds of all those who expressed a view said that they are keen to do more to reflect this growing diversity. A further 1 in 5 said that ‘We recognise our diverse membership and have [already] taken steps to reflect this.’

The poll was undertaken as part of a webinar which brought together trustees, advisers, representatives of the Pensions Regulator and other industry experts to discuss the challenges faced by women from ethnic minority backgrounds in Britain when it comes to retirement. The conversation drew on the findings of a recent report on the subject entitled ‘A glimmer of light on the horizon’, undertaken by LCP, IGG and Smart.

The research was based on more than 12 hours of focus groups, which included women from Indian and Sri Lankan, Pakistani and Bangladeshi, and Black African and Black Caribbean backgrounds, each split into older and younger age groups.

Two positive messages from the research, leading to the ‘glimmer of light’ title, were:

1. A generational shift, with younger women from these communities more likely to be in paid work, more likely to have had higher education and more likely to aspire to financial independence than their mothers and grandmothers.
2. A real hunger to know more about pensions and retirement finances, albeit starting from a low base of knowledge.

Some of the challenges highlighted in the report were ongoing knowledge gaps and mistrust around pensions, including uncertainty about tax relief and what happens to pensions when changing jobs. Many of the participants also preferred saving through property, business, gold, or community-based schemes, which they viewed as more tangible and within their control.

For pension providers and trustees, some of the ways in which they could tailor their communications to reflect this growing diversity ,which were highlighted in the report, included:

• Using a diversity of ways to communicate about pensions: Use a range of formats and channels, and a range of voices, including trusted third parties such as spokespeople from different communities.
• Not assuming people understand the basics: Make sure all communications reiterate key points in a clear, jargon-free way.
• Putting information where people already are: Find out where members go for pension information and form partnerships, including with faith-based centres and other community networks.

Shayala McRae, Principal at LCP, said: “It’s promising to see the industry wanting to do more. These discussions encourage us to listen, reflect and focus on what works, as well as what may have been overlooked when engaging with diverse member groups. The next step is to turn insights into practical actions that improve the experience for these members.”

Priti Ruparelia, Trustee Director and Head of DC at IGG, added: “There isn’t a one size fits all approach to member engagement. That’s why it was important for us to hear directly from women about the information they need, the channels they trust and how they want to be communicated with. Taking the time to understand those preferences helps us design engagement that will be more likely to deliver better outcomes.”