“Boring office job” – that’s my standard answer when someone asks me what I do for work. The extent to which this is true depends on the audience, but certainly for most of my peer group, quite possibly the majority of my generation, it’s a fair summary. I have settled into this nondescript response for a number of reasons, but the primary motive is to avoid the crestfallen, glazed-over look that I have to try and navigate my way past if I give a more comprehensive answer.
“I work in pensions” – that’s what I used to say. I hated it. Because they hated it. THAT word. What is it about “pension” that causes people to disengage with haste? From marketing executives, PE teachers, tradesmen, catwalk models (once!), I’ve even encountered taxi drivers who decided even their conversational skills couldn’t justify further interaction with the pensions consultant in the back.
It has occurred to me though, as my career in the pensions industry has continued (and perhaps, I have grown-up), that this issue has greater consequences than just ruining all my encounters with catwalk models. Bigger even than having an ‘unfashionable job.’ I accepted that some time ago, and the more I enjoy what I do, the less I care about wider perception.
The real problem is that the masses, huge swathes of both mine and generations either side of mine, have no interest, or real understanding of pensions.
It often takes only a couple of minutes, coupled with the latter response to the “what’s your job” question mentioned earlier, for naivety, disengagement and often multiple untruths to surface during a conversation about pensions with someone my age. I’m not referring to confusion around decreasing accrual rates, reduced escalation, or the seemingly never-ending closure of DB Schemes. The ‘issues’ I have had conversations about recently are closer to “what’s the point”, “I left it too late so I lost my pension from my last job”, and the rarely surpassed “I’m in a Final Salary Scheme so at least I know that I’ll retire on whatever my final salary is.” One that will stay with me was the nurse who dealt with me when giving blood recently, who talked me through, with some frustration, how her entire NHS pension built-up to date had been “scrapped”. Issues indeed.
How did it come to this? Why isn’t there more interest in providing for what could be a huge proportion of our own lives? I think there are a few undeniable contributors.
As a nation, we lack financial knowledge – at no time in my education, which lasted far longer than it had to, was I taught anything resembling real-world finances – useful understanding of a mortgage, a pension or interest rates, how they worked, what was the value of each. The basics of income and expenditure could have been instilled in me far earlier, and the boom era of ‘payday loan’ companies in recent years suggests there remains an endemic, cultural problem.
As we embrace a more instant, accessible, interactive age, pensions have to get smart. To those who argue that lack of demand from members proves otherwise, I urge caution against a potentially fatal self-fulfilling prophecy. The longer people within the industry convince themselves of that, the more engagement decreases, technology and member-experience stagnates, and ‘we’, the industry, resemble scarecrows in a long-forgotten field of paper records, microfiche, 6 week turnaround times and payments by cheque. All of which will lead to even greater contrast between the long-term financial product of a pension, and shorter ones such as my current account, where I use my fingerprint to login, view and instantly transfer money as and when I please.
The word itself, pension, is a big part of the problem. It needs a re-brand. Mass-popularity is now measured weekly if not daily; what was hot last month is old news now.
The word pension is commonly associated with old people, getting old, being old.
As a word, a concept, and a lifestyle choice, it seems outdated, old-hat, barely worthy of registering on increasingly impulsive and short-term to-do lists. Something needs to change. Providing money for what could comfortably comprise the final forty years of your life isn’t something that should be out of sight, out of mind, yet for many people who have yet to complete their first forty, that is the case.
So what’s to be done? As an industry, it is often accepted that ‘greater engagement’ is required, but all too frequently this is driven by the desire of a specific scheme or organisation to increase the success of their latest targeted project. As a result, the communication is tailored, the desired engagement pre-defined, and success measured against criteria that won’t include “do our members actually understand the basics of a pension?” or “do our employees realise they don’t ‘lose’ their investment if they change jobs?”.
Undoubtedly, as an industry, we are better than we were. Auto enrolment, pension freedoms and online member access are all raising the profile of pensions in the public consciousness. However, widespread scheme closures, and scandals at BHS, British Steel and most recently, Carillion are arguably taking more of the limelight, and testing Richard Branson’s theory that “there is no such thing as bad publicity”.
It is a long-term, complex problem that needs long-term, consistent solutions, but I personally have started small. I have realised that it only takes that 2-minute chat to dispel the myth that pensions ‘are frozen’, or that they disappear when you leave an employer. I know that the sum-total of all my interactions will do little, but as a big believer in marginal-gains, I encourage all of you who do know that little bit more, who could dispel a myth or open someone’s eyes to the benefit of a pension during those 2-minute chats to go ahead, take the chance and start effecting change.
Tell people, “I work in pensions”…only then can we hope to improve their reactions.