PENSIONS INSIGHT
Get emotional about pension savings
Johanna Nelson, associate director, communications, Punter Southall Aspire, follows up on her previous article and identifies ways to use emotions in pensions
T here are fears of a significant rise in the number of employees opting out of auto-enrolment schemes when the minimum employee contribution rate rises to 5% next year. Therefore, it’s critical we find new ways of showing people how important it is to maintain and build on their pension savings. Otherwise, surely, it’s inevitable that our society will face a retirement funding crisis in the years to come? We must enable our employees to retire with decent pension pots. But how? In my previous article (see June, Issue 41) I looked at the concept of emotional marketing. This is the idea that as human beings we are driven by emotional triggers – such as happiness, anger, fear and greed – far more than rational factors like reason or logic. That’s why you’ll often see good marketing campaigns appeal first and foremost to emotions. It’s why so much marketing is designed to make us laugh, shock us or make us feel good. Of course, logic does have a role to play, but it’s widely thought that we often make an emotional decision first – then justify it with reason. In our experience, the world of pensions doesn’t use emotional marketing. There are probably several reasons for this, including the jargon and the legal necessity
to keep things straight. Are there any emotions we can appeal to that will encourage more people to save for their retirement – and encourage those who are already doing so to save more? Here are four examples of how we could use emotional messaging. ...widely thought that we often make an emotional decision first – then justify it with reason ● Fear – Ideally, people shouldn’t be scared into submission but made to feel positive about pension saving. That said, some of the most effective public- information campaigns have highlighted miserable outcomes – take the drink- driving and Think Bike road-safety campaigns, for example. So, one way to highlight the pitfalls of not saving is to include a range of forecasts in annual statements, alongside showing what current behaviour is likely to lead to. For example, a separate forecast could show what retirement income is likely to
be if contributions are stopped or reduced. That might make people keep their existing contributions or even up them. What if employers sent these statements to employees who are not participating in their pension schemes, too? The figures would show just what that they are facing in retirement, which might shock people into action. A communications campaign could focus on the negative outcomes people can expect if they do not save revealing what kind of lifestyle someone with a minimal pension can expect, and the difference every few hundred pounds a month makes. Ask people to imagine their lives without a car, if they are unable to maintain their home and if basics became a luxury. The more vivid these scenarios, the more emotional the campaign. ● Love – Love is not something which usually springs to mind when we talk about pensions, but building a pension is a means to an end. It’s not something we do for its own sake but to enable us to enjoy life after we’ve finished work. A big part of our post-working life is spent with loved ones, so this is a key message for people who might need convincing that a pension is something worth bothering about. Emphasise that
| Professional in Payroll, Pensions and Reward | July - August 2018 | Issue 42 34
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