The first session of Pension Insight's Pensions Communications Forum looks at the challenges employers are facing post pensions change


Helping people make the best decisions: achieving mass education

Michelle Cracknell, chief executive, Pensions Advisory Service

“Over the last few years, there has been a quiet revolution in pensions that has become quite noisy,” commented Michelle Cracknell, chief executive, Pensions Advisory Service. “We're now left with the critical last piece of the jigsaw: helping people with their retirement decisions, and empowering them to make decisions.”

Cracknell discussed the importance of starting the conversation with employees early – not as early as school age, but at least 15 years pre-retirement, to ensure that they have considered all their options, as well as considering all their assets and understanding the lifetime allowance: “People don’t know what they don’t know!”

Unlike previous generations, people are now no longer retiring with resources, but on a budget – and now have the responsibility of consumers.

Equally, the relationship between retirees and their employers and providers is complex: Cracknell highlighted the “trust and engagement problem” in contract-based schemes, while saying that changing working patterns have also limited in-office communications.

Moreover, the concern remains for employees around the ‘embarrassment’ of telling Pension Wise that they’re in the dark.

Cracknell commented: “Pension Wise conversations need to be the social norm - we need to remove the dread and embarrassment. Guidance should be about talking about yourself, what you know, and what you need.”

She erred away from dissuading employees from taking advice, saying that importance should not be placed on costs, but rather on helping people understand what they assets they have, and what guidance or advice they need.

“Pension Wise can help people, but we must work closely with employers, providers, schemes and advisers to ensure that people make the right decisions with the right information.”

Radical pension freedoms require an equally radical approach to communication

Andrew Pennie, marketing director & head of pathways, Intelligent Pensions


According to PLSA figures, 70% of people currently think they will take drawdown at retirement, 53% think it will provide guaranteed income for life, and 23% believe that it doesn’t involve risks.

This only highlights the lack of understanding, according to Andrew Pennie, marketing director & head of pathways, Intelligent Pensions, as he discussed communication barriers.

“Pensions language is alien to most people, which is difficult to move away from in a heavily regulated environment – but not everyone is going to become a pensions expert,” commented Pennie. “The industry is guilty of over-communication: huge amounts of documentation rather than tailored information, communicated individually.”

Meanwhile the decumulation period is badly misunderstood: people focus on it at retirement – but for truly good outcomes, members need to focus (according to Pennie) five years out in order to engage, make choices, and successfully transition.

Pennie discussed how good communications need to explain how members should go about deciding their optimal retirement income, and then what choices they need to make to get to that income.

“One size doesn’t fit all,” he said. “We must understand people’s needs and priorities, and their appetite for risk.”

“At the very basic end of the ‘good practice’ spectrum, you have to communicate the options. It would be even better to provide education and advice – and it would be best to provide advice pre-retirement and facilitate tailored investment strategies for members.”

Panel discussion: Imparting financial guidance in the workplace: crafting a strategy for success

Jamey Johnson, deputy director, Pension Wise operations, HM Treasury
Andrew Pennie, marketing director & head of pathways, Intelligent Pensions
Julie Richards, group director of pensions, Walgreens Boots Alliance


“People coming to us have almost no knowledge of what pension they have, and no idea where to begin or what questions to ask,” worried Jamey Johnson, deputy director, Pension Wise operations, HM Treasury. “But they have a very fixed idea of what they want, and no understanding of the consequences of cash lump sums and tax.”

While commenting that it is still early days, Julie Richards, group director of pensions, Walgreens Boots Alliance, agreed – adding that she has seen a trend of people in DB legacy schemes enquiring about tranfers.

Johnson, however, went on to say that Pension Wise can equip employees with the information they need – and enables further discussion with advisers.

The panel discussion made clear the need for Pension Wise as the first step in the decision-making journey, with Andrew Pennie adding that if people are left to their own resources there is a real danger that they will either over-draw and run out of income – or under-draw and compromise their standard of living.

However, with Richards saying, “There’s no easy answer to who should take the burden of providing and paying for advice,” the panel also come to the consensus that Pension Wise is just the first step towards independent and regulated financial advice.

“Schemes and employers can’t afford to wait for the situation to evolve – they have to start taking action now with tools and education,” urged Pennie. “Employers should take advantage of the £150 allowance to provide tailored and personal advice.”