The pensions landscape is quickly changing and the industry has an obligation to ensure that the thinking that accompanies this is also adapted, writes Talya Misiri.

In discussion with industry experts recently, I was reminded of the widely-held view among those in the industry (and unfortunately not their peers outside of it), that pensions are a ‘young persons issue’. This points to the fact that it is largely the duty of the young, of whom are currently in employment, to ensure that they save for their pension up to their pensionable age to achieve a desired lifestyle in retirement.

In addition, the evolving landscape, whereby the number of savers with defined contribution pensions are quickly overtaking those in defined benefit schemes, naturally calls for increased, clearer communications. Essentially, as pensions are becoming more of a responsibility for the individual as opposed to the employer or government, there is a need to promote retirement savings in a way we haven’t previously.

With auto-enrolment being a considerable success in enrolling the majority of the UK workforce into pension saving, it is time that the reliance on inertia is replaced with active engagement. While many industry speakers have argued this, however, few have proposed how it can be achieved.

It is clear that a key reason many become disengaged from their pension savings is due to the lack of ownership they feel over it. The introduction of savings products such as stocks and shares ISAs and even the more recent emergence of cryptocurrency investing has grasped the interest of considerable numbers of young workers.

But why these and not pensions? When it comes to these other savings, it is because savers can physically see their funds growing and are able to influence rates of growth and returns through putting in more or less.

So surely, the solution is make pension savings more accessible. My answer, market pensions in terms of investments.

It can be argued that the pensions dashboard, that aims to present all of an individual’s pension pots in one place will aid in making pensions more accessible. But, we also need to make members aware of their ability to actively make investment decisions.
Increasing numbers of tech-savvy millennials and their peers are much more likely to pay more interest to their pensions if they are made aware of what their funds are invested in and if they are informed of their ability to actively decide where and what their capital is supporting.

By marketing pensions as a personal investment product, as well as highlighting the additional tax relief and employer contributions, saving for retirement in this way almost becomes a no-brainer.

It is this that I believe will encourage members to pay more attention to their pensions, as well as providing them with a greater sense of control.

So, the next time pensions are discussed in the workplace or down the pub with friends, we shouldn’t be asking “are you saving for a pension?”, but “what is your pension invested in?”

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