State Street Global Advisors’ Sophie Ballard offers some ideas on how to improve pensions communications for women
Many people find it difficult to save enough for retirement. While auto-enrolment, and more recently auto-escalation, provides a good foundation, for many this will not be enough. Competing responsibilities and income differentials add extra dimensions to that challenge, particularly for women.
New research suggests that the average woman could have 32% less in her pension pot than her male counterparts by retirement*. Women are more likely to work part time or take on multiple roles creating a barrier to reaching the autoenrollment threshold**.
As an industry we have to work to help excluded groups, including part-time earners and the self-employed, to raise awareness of this potential loss in pension savings. This could include:
• More robust resources and toolkits to increase education and understanding
• Carers’ ability to earn credits for auto-enrolment
• Student loan payments and childcare voucher payments should default into pension savings once no longer required
• Implementing the pensions dashboard – making pension information more accessible by having everything in one place online
Life and family responsibilities, which may require career breaks, can also create a significant gap in pension saving potential. Factors like these contribute to shorter working careers, meaning less opportunity to earn and convert some of those earnings into pension savings.
Often this is within the optimum earning period of 30-45, when savings potential is at its highest. Ways to solve this could include:
• Providing better information to those embarking on parental leave
• Returner programmes*** and financial boot camps – encouraging women to raise their savings for short periods of time
• Raising awareness of pensions outside of the workplace – using forums and women’s networks to raise awareness of the benefits of long-term saving.
Recent research undertaken by State Street Global Advisors**** shows that women want to be communicated to in a positive, promotional way. Furthermore, women are more likely to seek advice in groups rather than individually – something that can be harnessed through offering group financial advice sessions.
State Street Global Advisors is committed to helping members reach a good retirement outcome and retire with dignity. We believe that to provide this, members need to have access to robust default options, such as target date funds. These funds allow members to be invested in an age-appropriate, well-governed fund that changes over time to take into account behavioural, regulatory and market changes.
Not only does deep primary research, such as ‘New Choices, Big Decisions’ and ‘GAPS’ input into our target retirement funds, it also allows us to better understand what drives members behaviour to ensure we are communicating effectively with them.
We support clients with a number of additional tools, including running financial bootcamps to encourage members to increase their saving contributions, incorporating our ‘communications best practice’ framework into client communication programmes and helping clients put financial wellness initiatives in place to ensure members have the ability to save for retirement.
Sophie Ballard is vice president and account executive – institutional client group at State Street Global Advisors Ltd
State Street Global Advisors will be joining a panel discussion on how to improve retirement communications for women at the Pensions Communication Forum on the 9th May in Birmingham. To register to attend visit: http://events.pensions-insight.co.uk/pcf-18/
*SSGA GRM 2018
**CAB Research 2016