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Retirement adequacy: an open goal

This paper builds on our 2016 paper on communications methods for retirement saving. It explores how these communication methods could be successfully used by employers, pension providers, and Government to ensure savers adequately engage with their retirement options, drawing on examples and case studies from the UK and overseas.

What you will get from this policy briefing

By drawing from a range of examples both in the financial services sector and abroad, this paper provides:

  • An overview of current pensions policy initiatives
  • An assessment of different communication methods that have successfully encouraged positive behaviours throughout the savings process from accumulation to decumulation
  • Actions stakeholders can implement to help savers understand and increase their engagement with their retirement savings
     

Download the policy briefing

Insight

With increasing longevity, the rise of Defined Contribution pensions, and the introduction of Pensions and Freedoms, individuals are increasingly bearing more risk and responsibility for ensuring they have adequately saved for retirement. This shift coupled with difficult terminology, complex concepts, and an annual deluge of disclosure information can leave savers feeling overwhelmed, confused, and, as a consequence, reluctant to engage with their savings.  

In this pensions landscape, the way employers, pensions providers, and Government communicate retirement savings will play a vital role in ensuring individuals’ are adequately and sustainably saving.  More importantly, with the upcoming launch of the Single Financial Governance Body (SFGB) and pensions dashboard, the Government has an opportunity to incorporate these methods to ensure these initiatives are as successful as possible.

Recommendations

Our analysis suggests that successful communication should:

  • be based on tangible goals for retirement
  • allow savers to monitor their progress towards these goals
  • be segmented and targeted
  • build financial capability
  • promote tools to engage savers with their retirement savings

These methods provide consumers a targeted, practical and accessible approach to retirement savings throughout the savings process. Although each stakeholder will tailor their communications to suit their specific customers’ needs, these methods provide adaptable tools, based on consumer interests and behaviours that have impact in encouraging individuals to become proactive in managing their retirement savings.

Related documents

Contact Details

For further information, please contact the Policy Team at

Policy@actuaries.org.uk

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  • CILA 2022

    23 May 2022 - 24 May 2022

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    We continue to live in a world of global uncertainty. Survival depends on our ability to simultaneously navigate through the diverse root-causes, ranging from: the consequences of Climate Change; transitioning to Net Zero; increased inflationary pressures and supply chain issues; to self-imposed changes in regulatory requirements. CILA 2022 focuses on these challenges to ensure we continue to be informed and remain battle ready, as well as showcasing highlights of recent CMI outputs.

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    In the spirit of fostering the IFoA’s vibrant, global community and enabling our members to participate, we have decided to hold our AGM virtually again this year. This allows for greater accessibility to this important annual event, and for greater accountability of our organisation.

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  • The IFoA Conference 2022

    133 Houndsditch, London EC3A 7BX and Online
    22 June 2022 - 23 June 2022
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    We’re delighted to welcome you back to our first in-person conference since early 2020, also being delivered virtually in our first-ever hybrid event. The theme of our inaugural two-day conference is ‘Focusing on tomorrow’s actuary’ and will explore the contribution actuarial science is making to some of tomorrow’s biggest issues.

     

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